Fidelity claims 70% of institutional investors want crypto, but there’s a catch

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A Fidelity Digital Assets survey found that seven in ten institutional investors around the world, including advisers, family offices, pensions, hedge funds and endowments, are considering buying or investing in digital assets in the world. over the next five years. In addition, over 90% of those interested in the industry say they expect to have an allocation of digital assets in the portfolios of their institutions or clients within the next five years.

But that’s not all. More than half of respondents in the United States, Europe and Asia currently invest in digital assets, with adoption rates highest in Asia (71%). 56% of EU institutions and 33% of US institutions now hold investments in this asset class, up from 45% and 27%, respectively, last year.

The pandemic and the fiscal and monetary measures in response to it have been a catalyst for many institutional investors to define their investment thesis and operationalize it. says Tom Jessop, president of Fidelity Digital Assets.

However, there is some fine print in these results. The survey, which included 1,100 respondents in the United States (408), Europe (393) and Asia (299), was conducted at the height of the recent crypto bull market (December 2, 2020 – April 2, 2021 ). Bitcoin would hit an all-time high of $ 64,654 on April 14, coinciding with the main bitcoin exchange Coinbase going public. Since then, bitcoin, ether, and the broader crypto market have lost around 50% of its value. However, a spokesperson for Fidelity told Forbes, we haven’t seen a significant change in demand during the withdrawal, as institutions tend to take a long-term view and are experienced in managing cycles.

Bitcoin and Ether are far from their historic highs

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Additionally, it should be noted that not all respondents necessarily use the same internal definition of the term digital asset. Asked how it was presented in the survey (the full document won’t be released until September), a Fidelity spokesperson told Forbes, It was defined as assets that are issued and transferred electronically, and Bitcoin and Ethereum were given as examples. Regarding allocations, exposure to companies of digital assets (e.g. common stocks) could be considered part of a portfolio allocation in addition to cryptocurrencies.

Finally, although interest remains high, concerns remain that could hamper further adoption, the most important being price volatility. Another is the lack of fundamentals to assess value as well as concerns about market manipulation. On the positive side, concerns of the past about technological complexity for institutions and immature market infrastructures appear to have subsided.

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