What You Need to Know
- Of the firms who plan to adopt them, 90% plan to have an allocation in portfolios by 2026, Fidelity Digital Assets found.
- Adoption rates are higher in Asia, at 71%, but 56% of European institutions and 33% of U.S. institutions hold digital investments.
- Price volatility remains the main barrier to adoption, followed by lack of fundamentals to gauge value and market manipulation worries.
Seventy-one percent of institutional investors in a new survey said they expect to buy or invest in digital assets in the future, and more than 90% of those interested in digital assets expect to have an allocation in their institution’s or clients’ portfolios by 2026, Fidelity Digital Assets reported Tuesday.
Portfolio allocations to digital assets may include direct investments in cryptocurrencies or exposure through investment products and common stock of crypto companies.
This forecast indicates a continued acceleration in adoption over the next several years, according to the report. Fifty-two percent of institutions surveyed across the U.S., Asia and Europe currently invest in digital assets.
“The increased interest and adoption we’re seeing is a reflection of the growing sophistication and institutionalization of the digital assets ecosystem,” Tom Jessop, president of Fidelity Digital Assets, said in a statement.
“The pandemic — and fiscal and monetary measures in response to it — has been a catalyst for many institutional investors to define their investment thesis and operationalize it.”
The survey, conducted between Dec. 2 and April 2, involved 408 institutional investors in the U.S., 393 in Europe and 299 in Asia, among them high-net-worth investors, family offices, digital and traditional hedge funds, institutional investors, financial advisors, and endowments and foundations.
The survey results showed that the vast majority of investors find digital assets’ high potential upside and low correlation to other assets appealing, with the potential upside gaining 16 points among U.S. investors since 2019 and 13 points among Europeans since 2020.