Institutional investors in Asia were the most likely to have already taken the plunge.
A study of 1,100 large institutional investors found that almost 90% find digital assets appealing, and 80% felt they have a place in investment portfolios, Fidelity Digital Assets said this week.
The latest data from the firm’s 2021 Institutional Investor Digital Assets Study found that 43% regard cryptocurrencies as alternate assets, while nearly one quarter now view them as an independent asset class.
Unsurprisingly, the “high potential upside” was the most appealing attribute of digital assets, while high price volatility and the lack of fundamentals with which to gauge asset value were the biggest barriers to investment. Concerns about asset security, regulatory classification and market manipulation were also substantial causes of concern.
Tom Jessop, the president of Fidelity Digital Assets, said:
“The interest expressed in both owning digital assets directly or through a variety of investment products is yet another indicator of the maturation of digital asset markets, the diversity of participants and progress in how these investors are viewing digital assets’ role in portfolios. We’ve reached an inflection point where many institutions are deepening their commitment to the space and seeking new investment opportunities to express that interest in portfolios — in some cases, looking to incorporate other digital assets in addition to Bitcoin.”
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Asia First, Europe Second, U.S. Last
Asian institutional investors are far more likely to have adopted digital assets, with 71% saying they are exposed in the first year they were included in the study.
Next were Europeans with 56% now invested, compared with 45% in 2020. While U.S. investors’ interest is up dramatically since 2019, they still lag far behind, with 33% owning digital assets this year, compared with 22% two years ago.
Approval of an exchange-traded fund by the U.S. Securities and Exchange Commission would make a big dent in that, with 62% of U.S. investors saying they would have either a neutral or positive view of a Bitcoin ETF if one is green-lighted by the SEC.
The study surveyed about 300 investors from Asia, and 400 each from the U.S. and Europe. The respondents were financial advisors, high-net-worth investors, family offices, pension funds and defined benefit plans, crypto hedge funds and venture capital funds, endowments and foundations, and traditional hedge funds. The study was conducted between December 2 and April 2, before the massive crypto price crash in May.
