Citing results from a survey undertaken by Fidelity Investments, Bloomberg reported on June 9, 2020, that almost one-third of institutional investors hold crypto assets including Bitcoin (BTC) and Ether (ETH).
The ‘Big Boys’ are Here
With the tumultuous movement of the world economy, a large number of investors – both retail and institutional – are looking for alternative asset classes to safeguard their investments. With the U.S. Federal Reserve injecting trillions of dollars in the U.S. economy, investor confidence in fiat currencies seems to be steadily eroding.
In a bid to hedge against the weakening fiat and to combat rampant inflation, investors can be observed turning to the time-tested safe asset classes, including precious metals such as gold and silver. However, some investors are also not shying away from putting their wealth in the emerging asset class of digital currencies.
Per a survey conducted by Wall Street titan Fidelity Investments, close to 36% of the 774 respondents across the U.S. and Europe admitted to owning cryptocurrencies or derivatives.
Specifically, in the U.S., about 27% of institutions – namely pension funds, family offices, investment advisers, and digital and traditional hedge funds – stated their own digital assets. This figure indicates a sharp jump from 22% of institutions in 2019 when the firm surveyed a total of 441 institutions in the U.S.
The story is not too different in Europe where close to 45% of respondents are invested in digital assets.
Bitcoin and Ether Popular Among Institutions
More than a quarter of the respondents hold Bitcoin. Similarly, about 11% of the respondents hold Ether. In stark contrast to the price movement exhibited by many traditional assets – primarily due to the COVID-19 pandemic – Bitcoin is up 36% since the beginning of the year.
In an interview with Bloomberg, Tom Jessop, President, Fidelity Digital Assets, remarked:
“Europe is perhaps more supportive and accommodating.”
“(That 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.”
Jessop added that the survey results further cement the trends that point toward greater interest in and acceptance of cryptocurrencies as a new investible asset class. The survey, however, also found that volatile price fluctuations are a prime concern among investors that is hindering the widespread adoption of crypto assets.
In similar news, earlier this year, BTCManagerthat close to 36% of small U.S.-based businesses accept digital currency payments.