A recent research by KPMG has revealed that after a turbulent year for the cryptocurrency market, investor sentiment appears to be on the rebound.

The study, 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.

Renewed Optimism and Caution

The findings reveal an increase in crypto investments, with 54% of respondents allocating over 20% of their total investments to digital assets. Many investors, particularly those dedicating more than 50% of their assets to crypto, are committed to the industry for the medium to long term, typically a period of between 3 and 5 years.

However, the study also highlights a shift in investor behavior characterized by increased caution and scrutiny.

Market entrants, in particular, are conducting more thorough assessments of investment opportunities, requiring providers to put in greater effort to convert interest into actual customers. This trend is evident in the considerable gap between registration on crypto exchanges and active usage.

Security remains an important concern for investors when selecting preferred crypto exchanges, with 82% emphasizing its importance. Deposit and withdrawal options (65%) and transaction costs (62%) also rank high on the list of criteria.

The study also provides a perspective on risk among investors. While 34% of investors consider their investment in digital assets to be rather safe, most express various levels of apprehension, citing concerns such as market manipulation, regulation, and financial crime as key risks.

Asset Preferences and Regulation

Regarding asset preferences, Bitcoin maintains its position as the dominant player in investors portfolios, with 91% of respondents holding the cryptocurrency. Ethereum follows closely behind, with 78% of investors opting for the second-largest digital asset.

Interestingly, Solana has witnessed an increase in popularity, recording a 9% increase compared to the previous year, securing its position among the top digital assets favored by investors in the region.

The German government has been working on cryptocurrency regulations to protect investors and ensure financial stability. In 2019, laws were passed allowing banks to handle cryptocurrencies, and talks are ongoing about rules for crypto exchanges and ICOs.

Regulatory bodies like BaFin and the Federal Ministry of Finance oversee compliance, with a focus on Know Your Customer (KYC) and Anti-Money Laundering (AML) rules to prevent fraud on exchanges.