Digital Assets: Fidelity Report Says Institutional Adoption of Crypto Gaining Traction
80% of institutional investors found something appealing about the asset class.
Fidelity Digital Assets issued a report on digital assets on Tuesday based on a survey of nearly 800 institutions in the U.S. and Europe conducted from November 2019 through early March 2020.
A growing number of institutional investors believe that digital assets should be a part of their investment portfolios, the report found.
This was the first time Fidelity surveyed European investors, and the second consecutive year for U.S. institutional investors.
Key findings of the report by Fidelity Digital Assets
- European investors view crypto assets more favorably than US investors
- However, more US investors are drawn to digital assets than a year ago
- More than 1/3 of respondents confirmed they had actually invested in digital assets
- However, 60% of respondents believed they should invest in digital assets
- Bitcoin continues to be the digital asset of choice with more than 25% of respondents holding the cryptocurrency; 11% hold Ethereum
- What is appealing about digital assets? 36% – non-correlation with other assets; 34% – innovative technology play; and 33% – high potential upside
- About 40% of institutional investors classified digital assets as an alternative asset class
- However, 20% think it should be an independent asset class
- Perceived advantages of digital assets over other alternatives – more liquid; low transportation, transaction, and storage costs; unique return drivers
- Roadblocks to quicker adoption? 53% – price volatility; 47% – fears of market manipulation; 45% – lack of fundamentals for appropriate valuation
“These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class,” said Tom Jessop, president of Fidelity Digital Assets. “This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions.”
Further, greater adoption of digital assets by institutions will get a fillip because of improving price performance, the entry of incumbent service providers, and constructive research and coverage of digital assets by mainstream financial firms.
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