Pre-Crash Survey: 70% Of Institutional Investors Considered Investing In Crypto
Before the crypto market started its downturn in April this year, around 70% of surveyed global institutional investors planned to buy cryptoassets eventually.
Also, more than 50% of the 1,100 investors surveyed by Coalition Greenwich on behalf of Fidelity Digital Assets, a crypto-focused arm of US-based mutual fund giant Fidelity Investments, between December and April said they had digital asset investments, per Reuters.
However, since April, when multiple cryptoasset hit their all-time highs (ATHs), bitcoin (BTC) is down by 54%, while ethereum (ETH) crashed by 60% from its own ATH in May. Also, digital asset investment products saw significant ouflows in recent months.
In either case, before this sharp correction, around 90% of those interested in investing in crypto said they expected their company's or their clients' portfolios to include direct or indirect exposure to cryptoasset investments within the next five years, per the survey. Also, the respondents cited price volatility as the biggest obstacle for new investors, followed by the lack of fundamentals needed to assess value and concerns around market manipulation, it added.
"More so on the adoption front, there’s a lot of concern about competition, particularly competition from sovereigns," Jim Neumann, Chief Investment Officer of Sussex Partners, told Institutional Investor (II), commenting on the survey. "If the US or China, or whoever, goes into a digital yen or digital USD, then that's going to change the game." (Learn more: China Releases e-CNY Whitepaper, Says Cryptos Have No Value & Pose Risks)
The respondents in Asia had the strongest belief that digital assets are an important part of institutional portfolios, per II. In Europe, 77% of investors claimed crypto deserved a place in portfolios, while in the US, 69% of investors said digital assets were important, it added.
Meanwhile, Neumann added that his more "progressive, younger, tech-savvy" clients have a greater focus on the asset class while more seasoned investors have a harder time getting into the space.
At 10:12 UTC, BTC trades at USD 29,560 and is down by 6% in a day and 11% in a week. ETH dropped by almost 8% in a day and 15% in a week, trading at USD 1,739.
Watch Mary Callahan Erdoes, J.P. Morgan Asset & Wealth Management CEO, on Bloomberg TV, saying that most of their clients see Bitcoin as an asset class.