Investors are prioritizing blockchain infrastructure over DeFi due to liquidity risks, according to a CfC St. Moritz survey.
A recent survey conducted by CfC St. Moritz reveals a significant trend among major investors, who are increasingly directing their capital towards essential blockchain infrastructure instead of decentralized finance (DeFi) applications. This pivot is largely driven by ongoing liquidity and reliability challenges within the crypto ecosystem.
The survey included insights from 242 participants, encompassing a diverse group of institutional investors, crypto project leaders, regulators, and family office executives.
Notably, 85% of the respondents ranked infrastructure development as their foremost investment priority, eclipsing DeFi, compliance, cybersecurity, and improvements in user experience.
While there remains a general sense of optimism regarding revenue potential and innovation within the sector, liquidity issues are viewed as the most significant threat facing the industry today.
Liquidity Challenges
Survey respondents identified two prominent barriers limiting institutional investment: a lack of market depth and inadequate processing capabilities of existing settlement systems. These obstacles are believed to impede the entry of larger players into the market.
Despite roughly 84% of participants rating the macroeconomic environment as conducive to crypto growth, they expressed concerns that the current market infrastructure is not sufficiently advanced to manage substantial capital inflows.
Shifts in Industry Sentiment
The survey also indicated a changing outlook among industry participants. While many anticipate technological advancements will speed up by 2026, there is a notable decline in expectations for dramatic growth compared to findings from previous years. CfC St. Moritz interprets this as a sign of the industry's maturation, prioritizing practical applications of technology over speculative trends.
This observed trend emphasizes investments in foundational elements rather than consumer-facing applications, with a focus on reliable custodial solutions, effective clearing systems, robust infrastructure for stablecoins, and regulatory frameworks for tokenizing assets.
Regulatory Landscape Improvement
Additionally, the survey highlighted a more favorable view of the regulatory environment in the United States, now ranked second only to the UAE for digital asset jurisdictions. Experts attribute this improvement to the recent stablecoin legislation and clearer regulations for banks and financial institutions engaging with digital assets.
However, optimism regarding initial public offerings (IPOs) for crypto firms has waned. While last year saw significant listings from companies like Circle and Gemini, fewer participants now anticipate a continued wave of IPOs, citing global asset reevaluation and persistent liquidity constraints as primary concerns. This trend coincides with a shift by the world’s leading family offices toward investments in artificial intelligence, leaving cryptocurrency investments in the background.
