KPMG says Germans ramping crypto investments as Bitcoin halving nears

A recent KPMG study shows a renewed enthusiasm among German investors for the cryptocurrency market.

The latest uptick in investment comes after a challenging year for the sector and just as the market anticipates the upcoming Bitcoin halving event in mid-April 2024.

The report, which surveyed approximately 2,400 private crypto investors across Germany, Austria, and Switzerland, sheds light on changing investment behaviors and attitudes in the DACH region. The study indicates a surge in crypto investments, with 54% of respondents dedicating over 20% of their total investments to digital assets.

Notably, a dedicated segment of these investors, who commit more than half of their assets to cryptocurrencies, are prepared to support the industry for the next 3 to 5 years.

The report also points to a shift towards more cautious investment practices. New market entrants are now performing thorough evaluations before committing funds, a move that necessitates crypto service providers to enhance their efforts in converting registered interests into active investments. The gap between registration on platforms and active participation underscores this trend.

Security concerns continue to dominate the criteria for selecting crypto exchanges, with 82% of investors prioritizing this aspect. Deposit and withdrawal options and transaction costs are also key considerations for 65% and 62% of respondents, respectively.

Although 34% of those surveyed view their crypto investments as relatively safe, the majority still express concerns over market manipulation, regulatory changes, and financial crime.

Bitcoin remains the primary choice for investors, held by 91% of respondents, with Ethereum a close second at 78%. Solana has seen an increase in investor interest, rising by 9% compared to last year, reinforcing its position among the top digital assets in the region.

In the broader market context, the recent approval of Bitcoin spot ETFs by the U.S. Securities and Exchange Commission has been a boon, attracting substantial capital inflows. Since their introduction, Bitcoin ETFs have amassed $56.2 billion.

However, spot Bitcoin ETFs have seen a net outflow of $55 million on Friday, April 12, with the last week alone seeing a total outflow of $298.4 million.

Analysts suggest these withdrawals could be investors taking profits ahead of the halving, a strategy often followed by a reinvestment after a market dip.

The upcoming Bitcoin halving, which reduces the new supply of Bitcoin, is typically viewed as a precursor to a bull market, heightening expectations of increased demand as the cryptocurrency sector continues to expand.

“With the new supply of Bitcoin decreasing, demand is expected to rise, especially as the crypto industry expands. Additionally, as other cryptocurrencies, particularly those in AI and gaming, show promising growth, a bullish trend seems imminent,” Maciej Burno, CBDO of Reality Metaverse, told Crypto.news.