Crypto businesses and firms have been trying to draw the institutional crowd to digital assets for years, and it seems that institutional investors are finally catching on. Thus far, the Grayscale Bitcoin Trust (GBTC) is best known for its institutional clientele and with plenty of favourable Bitcoin developments this year, such as the market crash solidifying Bitcoin’s status as a viable investment asset option and also the Bitcoin Halving event in May which led to the entry of even more market participants, institutional investors are finally taking the bait.
According to Fidelity Digital Assets, a survey of 800 institutional investors reveal that 36% of them already hold some digital assets, with more than 50% of them acknowledging that they are considering digital assets in their investment portfolios. The pool of participants ranged from individuals in family offices, pensions, hedge funds, financial advisors to high net work individuals, endowment and foundations, coming from both the US and the UK.
“These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class. This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions,” Tom Jessop, President of Fidelity Digital Assets said.
Most of the respondents are familiar with Bitcoin, the bellwether cryptocurrency, with only 11% knowing of Ethereum. 91% of them believe that digital assets should constitute at least 0.5% of their overall investment portfolios. Bitcoin in particular is “appealing” to them due to three main reasons, with the first being its lack of correlation to other traditional assets, the second Bitcoin’s innovative qualities and lastly, the potential for precipitous growth.
While these investors still remain concerned about Bitcoin’s price volatility, the possibility of market manipulation and the lack of reliable factors to base Bitcoin’s price on, this year has helped to slightly change their perspectives on these three issues. At the same time, the industry is constantly coming up with new solutions and this year, with the US Fed injecting a significant amount of cash into its monetary system, inflation is expected to happen, which presents another opportunity for Bitcoin.
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