The results of a recent survey of 774 institutional investors in the US and Europe confirm that interest in and acceptance of cryptoassets as a new investable asset class is growing, according to Tom Jessop, President of Fidelity Digital Assets.
The subsidiary of the US-based mutual fund giant Fidelity surveyed the investors between November 18, 2019 and March 6, 2020 and found that:
Almost 80% of investors surveyed find something appealing about the asset class.
36% of respondents say they are currently invested in cryptoassets.
6 out of 10 believe cryptoassets have a place in their investment portfolio.
US investors allocated to crypto assets increased to 27% from 22% in 2019.
Of all US and European investors who have exposure to cryptoassets, over 60% buy these assets directly.
22% of US respondents invested in cryptoassets have exposure via futures (compared with 9% in 2019).
Over a quarter of respondents are holding bitcoin (BTC); 11% have exposure to ethereum (ETH).
91% of respondents who are open to exposure to cryptoassets in a portfolio expect to have at least 0.5% of their portfolio allocated to cryptoassets in five years.
“Almost 80% of institutional investors find something appealing about digital assets, with the three almost equally compelling characteristics across U.S. and European investors being: uncorrelated to other asset classes (36%); an innovative technology play (34%); and high potential upside (33%),” the company said, adding that more European investors (25% vs. 10% in the US) find the fact that certain digital assets are free from government intervention to be appealing.
“Europe is perhaps more supportive and accommodating,” Jessop told Bloomberg, adding that it could “be just things going on in Europe right now, you got negative interest rates in many countries. Bitcoin may look more attractive because there are other assets that aren’t paying return.”
The survey also showed that price volatility, concerns around market manipulation, and lack of fundamentals to gauge appropriate value remain as the main obstacle to institutional adoption. However, among US respondents, the strength of concerns decreased notably vs. last year across most factors.
“Investor concerns are largely focused on issues that will resolve themselves as the market infrastructure evolves,” according to Jessop.
The survey included 774 institutional investors in the US (393) and Europe (381) including pensions, family offices, digital and traditional hedge funds, financial advisors, and endowment, and foundations.