According to a recent survey by Fidelity Digital Assets, institutional investors, including US pension plans, are increasingly x.com/TheCryptoLark/status/1786372653860749811″ target=”_blank” rel=”noopener nofollow”>inclined to invest in crypto assets, including bitcoin.
The survey covered several institutional investor segments, including financial advisors, family offices, hedge funds, endowments, foundations and pension funds.
Institutional Investors Dominate crypto Adoption
The survey recommendations indicate a significant increase in institutional interest in cryptoassets. Of the total respondents, 74% expressed their intention to purchase or invest in digital assets in the future, a slight increase from 71% the previous year.
In particular, high net worth US investors showed a substantial increase in their preference for crypto assets, with future interest increasing from 31% to 74% year over year.
Despite the positive sentiment, the survey also highlighted concerns and barriers faced by institutional investors. Price volatility emerged as the most important obstacle: 50% of respondents cited it as their main concern.
Other key concerns included a lack of basis for assessing appropriate value (37%), security issues (35%), market manipulation (35%), and regulatory classification of certain currencies as “unregistered securities” (33%).
The survey highlighted a notable shift in perception among institutional investors. Investors in the US and Europe reported greater familiarity, better perception and greater number of investments in crypto assets. Europe has caught up with Asia in terms of global growth. adoption and positive perception, while the United States is still lagging behind.
In terms of specific investor groups, high net worth investors, crypto hedge funds/venture capital firms, and financial advisors exhibited the highest adoption and consideration rates of digital resources.
This increased adoption can be attributed to the organizational structures and investment decision-making policies of these groups. On the other hand, family offices, pension/defined benefit plans, traditional hedge funds, and endowments and foundations showed lower levels of adoption.
bitcoin ETFs Generate Huge Interest
The survey also explored the features of digital assets that institutional investors find most attractive. The potential for great benefits, the opportunity for investments in innovative technology and the enablement of decentralization were cited as the most attractive aspects.
Additionally, participation in decentralized finance (DeFi) and yield opportunities gained more attention compared to the previous year, while concerns about lack of correlation decreased.
The study suggests that institutional investors in Europe and Asia are more accepting of digital assets in their portfolios than their American counterparts.
In short, bitcoin exchange traded funds (ETFs) and multi-digital asset funds, both actively and passively managed, emerged as the most attractive products among the investors surveyed. European respondents also expressed interest in digital asset interest accumulation offerings. Fidelity Digital Assets also expressed the following:
The increased adoption reflected in the data speaks to a strong first half of the year for the digital asset industry. While the markets have faced many headwinds in recent months, we believe that the fundamentals of digital assets remain strong and that the institutionalization of the market over the past few years has positioned it to weather recent events. Institutional investors have experience managing cycles, and the largely inherent factors they cited as attractive in this study will likely remain as the market emerges from this period.
As of now, the largest cryptocurrency in the market, bitcoin, has regained the threshold of $60,500 after a sharp drop of almost 20% from its all-time high of $73,700 on March 14 to $56,000 on Wednesday.
Featured image from Shutterstock, chart from TradingView.com
