Institutional investors interested in digital assets: survey

Almost half (47 per cent) of institutional investors are interested in including digital assets in their investment portfolios, according to a survey by Fidelity Investments Inc.

The study, which surveyed more than 400 U.S. institutional investors, including pension plans, family offices, crypto and traditional hedge funds, found 22 per cent of respondents said they already have some exposure to digital assets, while a further 40 per cent said they’re open to making investments in the next five years.

Institutional investors are becoming more positive about digital assets, with 47 per cent of respondents saying they consider digital assets an innovative technology play and 46 per cent citing digital assets’ low correlation to other assets.

Read: Are institutional investors moving into cryptocurrency?

“We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments,”said Tom Jessop, president of Fidelity Digital Assets Services, in a press release. “More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets — new and old — becomes more readily apparent.”

However, respondents cited price volatility, lack of clarity around regulation, cryptocurrency’s limited track record and lack of fundamentals as drawbacks to investing in digital assets.

On how respondents would prefer to buy or invest in crypto assets, opinions varied. Almost three-quarters (72 per cent) said they would prefer investment products that hold digital assets, 57 per cent said they’d want to buy crypto assets directly and 57 per cent said they’d buy an investment product that holds digital asset companies.

Read: Institutional investors changing portfolios to deal with uncertain markets: survey

When gaining exposure to digital assets, 37 per cent of investors indicated they prefer to deal with a traditional financial firm, followed by 24 per cent who said they prefer dedicated crypto-focused financial firms. The majority (76 per cent) placed security and safety as their most important factor when considering a custodian for digital assets.