The much-talked-about adoption of digital assets by institutional investors seems stronger than ever, as large financial institutions and corporate investors have been quietly navigating the crypto universe for months.
Nearly half of institutional investors acknowledge the benefits of having digital assets in their investment portfolios and are looking to increase their exposure to this market in the coming years, according to the recent findings by Fidelity Investments.
The survey carried out by the global financial analytics and insights provider Greenwich Associates on behalf of Fidelity Investments revealed the attitude of large financial institutions and advisory firms towards cryptocurrency-based financial instruments. Greenwich Associates experts surveyed over 440 institutional investors from the US, including managers of hedge funds, pension funds, and assets found that investors consider digital assets as a legitimate investment tool.
The results of the survey revealed a consistently strong interest in digital assets from all types of institutional investors. 22 percent of respondents said that they already own cryptocurrency-based instruments in their portfolios. A further 47 percent acknowledged the benefits of having digital assets in their portfolios, mostly due to a low correlation with other asset classes.
Also, the research showed, that 57 percent of respondents chose to buy cryptocurrencies directly, while 72 percent preferred investment products based on digital assets.
Tom Jessop, the head of Fidelity Digital Assets, thinks that the results show an interesting outcome, as hardly anyone would consider investing money directly in euros or dollars.
Crypto Winter — No Problem
It is worth noting, that the survey was carried out between November 26, 2018, and February 8, 2019, during a severe bear market that caused serious damage to the industry. Tom Jessop remarked that the so-called crypto winter had very little affect on institutional interest in digital assets.
Many companies are beginning to realize that cryptocurrencies and distributed ledger technologies (DLT) are the new reality. Thus, they are trying to embrace it either by allocating assets in the industry and trying to explore its fundamental and technical aspects by creating their own networks and systems.
Apart from encouraging numbers on institutional adoption, the survey revealed the soft spots and hot issues are still holding back industry development. Thus, the survey participants mentioned high volatility, high levels of fraud, and regulatory uncertainty as major concerns that influence their investment decisions.
Due to such stains as like the recent case of Bitfinex attempting to hide over $800 million of losses in funds, many traditional investors are opting to shy away from the cryptocurrency industry for now.
Do you think that the Fidelity Investment research proves that institutional adoption has become a reality? What are your thoughts on the results of the survey? Let us know your thoughts in the comments below.