Majority of institutional investors plan to buy digital assets: Study

By Shilpa Annie Joseph, Official Reporter
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According to a study by Fidelity’s cryptocurrency business, seven out of ten institutional investors plan to invest in or buy digital assets in the future, despite the price volatility.

More than half of the 1,100 institutional investors surveyed globally by Coalition Greenwich on behalf of Fidelity Digital Assets between December and April claimed they had digital asset investments.

As per the research, nearly 90 percent of those interested in investing in future stated they expected their company’s or their clients’ portfolios to include digital asset investments within the next five years. This comprised direct cryptocurrency investments or exposure through stocks of cryptocurrency firms or other investment products.

Those surveyed included high net worth investors, family offices, digital and traditional hedge funds, financial advisors and endowments, according to the company.

Founded in 2018, Fidelity Digital Assets is the cryptocurrency division of Boston-based Fidelity Investments and provides institutional investors custody and execution services for assets such as bitcoin.

The company was one of the first mainstream financial services companies to embrace cryptocurrencies, which have attracted a growing number of major financial institutions. Despite the mainstream interest, cryptocurrency prices and trading volumes have slumped. Bitcoin has fallen around 50 percent since its high in April.

The companies surveyed cited price volatility as the biggest barrier for new investors, followed by the lack of fundamentals needed to assess value and concerns around market manipulation.

According to a JPMorgan Chase’s latest survey, “Only 10 percent of institutional investment firms trade cryptocurrencies, with nearly half labeling the growing asset class as “rat poison” or expecting it would be a temporary fad.”

World’s biggest inter-dealer broker, TP ICAP announced last month that it was launching a cryptocurrency trading platform with Fidelity and Standard Chartered’s digital assets custody unit.

Related: TikTok bars influencers from promoting cryptocurrencies on its platform