Institutional investors are slowly pouring into the crypto market with 22 percent of having added digital assets on their portfolio, a recent Fidelity survey showed.
According to a May 2 press release, most of these investments were made in the last three years with the growing hype around the digital assets.
The US-based asset management firm said that it has surveyed 411 institutional investors in the United States which includes pension funds, family offices, crypto and traditional hedge funds, financial advisors and endowments and foundations.
The survey also indicated that 40 percent of the participants are open to investing in digital assets over the next five years.
Making an entry into the crypto market
The primary aim of the survey was to project the investors’ mindset towards the new asset class.
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Fidelity found out that, although 47 percent of investors are planning to add digital assets into their portfolio, the approach towards the market varies. While 72 percent of participants are willing to buy investment products holding crypto, only 57 percent are comfortable to purchase digital assets directly. Another 57 percent are willing to buy an investment product that holds digital asset companies.
“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, a provider of custody and trade execution services for digital assets to institutional investors.
“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,” he added.
Appealing asset class
The survey also concluded that 47 percent of institutions believe that digital assets are an innovative technological asset class while 46 percent think that the low correlation between digital and traditional asset classes is an appealing characteristic.
“Institutions are doing the work to develop their own investment theses—but there’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them,” Jessop added.
Many previous surveys also projected the approach of high volume investors towards the new investment industry. Last month, a joint study by Global Custodian, The Trade Crypto, and BitGo revealed that 94 percent of endowment funds have some form of cryptocurrency investments. The participants of the survey were based in three countries – the United States, Canada, and the United Kingdom.