Institutional adoption of cryptocurrencies has seen great momentum over the past year, leading to billions of dollars being poured into the industry with a sense of legitimacy. Now, several high net worth investors have diversified their personal portfolios through crypto. Additionally, companies like MicroStrategy and Tesla have also added them in the billions to their balance sheets.
In fact, more than half of the institutional investors surveyed in a recent Fidelity report seemed to have invested in digital assets in some form.
The study, which surveyed 1,100 institutional investors in the United States, Europe and Asia, found that Asia and Europe had higher investment rates than the United States. It also found that 70% of all surveyed investors in Asia are already delving into digital assets.
According to the report, this could be because Asian investors are also the first to adopt more traditional digital payments.
As far as the cryptocurrency of choice is concerned, Bitcoin and Ethereum stood at the top, followed by Litecoin and Binance Coin. More interestingly, however, the survey found that a very small number of investors directly hold these assets in their portfolios.
This has been the case in the U.S, where an increasing number of respondents prefer investment products over direct purchases of digital assets.
On the other hand, the preference of European and Asian investors for the direct purchase of digital assets increased during the year. This could likely be due to the vast array of public trust-structured investment products available in the U.S., along with a number of private fund offerings issued by managers.
Either way, there has been an overall increase in investors interested in products that own multiple digital assets. With thousands of digital assets on the market, it seems only logical for investors to not want to miss out.
Either way, 71% of respondents in the US and Europe plan to buy cryptocurrencies in the future. Moreover, 70% of all investors surveyed had a neutral-to-positive perception of digital assets. This upturn in intentions and interest raises the question of what is driving these investors to embark on this new asset class.
According to the report, the most appealing attribute of digital assets is their potential upside. With BTC noting a 303% increase in its 2020 ROI, that call is hardly out of place. Secondly, ‘innovative technology play’ has been crucial too, with 39% of all respondents sharing this sentiment. The lack of correlation with other assets also played a role in catalyzing this appeal.
This last factor has, in fact, gained further ground in the U.S and Europe over the past year. Especially at a time when interest rates close to zero are popular and these regions have seen an increase in fiscal stimulus. Many young investors in the U.S have invested their stimulus checks for buying Bitcoin and other digital assets.
