According to a recent survey, almost 80% of institutional investors would be fascinated by digital assets.
The survey was conducted by Fidelity on 800 financial institutions in the United States and Europe, including financial advisors, family offices, pension funds, hedge funds, large investors and foundations, and it also found that more than a third of them have already invested, directly or indirectly, in this market.
It was conducted from November 2019 until early March 2020, ending shortly before the collapse of global financial markets, and found that almost 80% of the institutions surveyed admitted that they were attracted to this new asset class.
The president of Fidelity Digital Assets, Tom Jessop, reiterated the existence of a trend that is being noted in the financial markets, related to increased interest and acceptance of digital assets as a new asset class to invest in.
He also said that the results of the survey are in line with what Paul Tudor Jones revealed in early March when he said that investing in bitcoin could be a hedge against inflation.
About Tudor Jones’ statements, Jessop said:
“[It] confirmed what a lot of macro investors were thinking”.
Compared to last year, the percentage of US investors owning digital assets has increased from 22% to 27%. However, there are still some obstacles for institutional investors to enter this sector.
In particular, the main problems would be:
- excessive price volatility,
- lack of fundamentals for assessing the value of these assets,
- market manipulation.
Exposure to crypto derivatives (such as futures) has increased much more, from 9% in 2019 to 22%, while overall 36% of respondents said they already included digital assets in their investment portfolio.
Bitcoin is the preferred asset, chosen by more than a quarter of respondents, while 11% also said they have invested in Ether.
Fidelity Digital Assets’ research director, Ria Bhutoria, added that the current unconventional monetary policy of central banks is forcing investors to find new ways to preserve their wealth, pushing them towards digital assets as well, given their uncorrelated nature with other financial assets, and their high growth potential.
However, according to Bhutoria, this specific interest may be short-lived if crypto service providers are unable to offer large institutional investors the appropriate tools to overcome the obstacles they are facing now.