Nickel Digital Asset Management surveyed more than 200 executives at institutional investment firms and wealth managers about the future of digital assets.
More than a third (35%) believe the Middle East will see the strongest growth in institutional adoption over the next three years. The U.S. and the EU, including Switzerland, were named by 24%. The UK received 7% of responses, while Asia-Pacific accounted for 6%.
Access to capital and government backing were among the main reasons respondents gave for the region’s appeal. Some 45% pointed to the availability of sovereign and institutional capital. Government support came next at 42%, followed by tax efficiency at 37%. Another 32% cited the speed of regulatory and policy development.
The UAE received the most support among countries in the region. It was named by 41% of respondents, while Saudi Arabia came second with 34%. Qatar received 9%, and Bahrain 6%.
The survey included executives from the U.S., UK, UAE, Germany, Switzerland, France, Italy, the Netherlands, Singapore, Brazil and the Nordic countries. It also asked where the Middle East might stand in the global market by 2030. Respondents expect the region to rank among the world’s three leading institutional digital asset hubs.
The region’s regulatory framework also received relatively strong ratings. Around 31% of those surveyed said the UAE and Bahrain were more effective than Western markets at managing risks related to institutional digital assets. Another 55% considered them about as effective, while 10% said they were less effective.
Geopolitical risks remain part of the investment equation. Some 88% of respondents said these risks influence their decisions when considering digital asset exchanges, custodians or asset managers based in the Middle East. For 29%, the impact is significant.
Regulation and custody infrastructure could make a difference to future investment flows. One-third of those surveyed (33%) said stronger regulatory and custody frameworks in the UAE would make their organizations much more likely to invest in funds, products or managers based in the region. Another 57% said they would be somewhat more likely to do so.
Despite the concerns, most respondents expect their organizations to make greater use of digital asset services based in the Middle East. Some 22% plan to increase their use of regional products, managers and service providers significantly over the next two years. A further 60% expect a more moderate rise.
The survey also points to gaps that could slow institutional adoption. Around 22% of respondents cited the region’s limited track record and institutional ecosystem. Another 15% mentioned a shortage of local talent, limited operating history, market liquidity and the relatively narrow range of digital asset products available to institutional investors.
Anatoly Crachilov, CEO and founding partner of Nickel Digital, said the Middle East had been attracting digital asset investment through regulatory development, access to institutional capital and the growing use of digital finance. He added that institutional investors and wealth managers were looking beyond short-term developments and paying more attention to the region’s long-term prospects.
Nickel Digital Asset Management is a London-based digital asset investment manager founded by former employees of Bankers Trust, Goldman Sachs and JPMorgan.
The findings suggest that while geopolitical risk and a limited institutional track record remain concerns, most respondents still expect their use of Middle East-based digital asset services to grow over the next two years.
