A study compiled by the American multinational financial services corporation Fidelity Investments informed that a third of large institutional investors own a form of cryptocurrency. The highest level of interest came from Europe, followed by the US.
Institutional Investors Choose Cryptocurrencies
According to the report from Bloomberg citing the survey from Fidelity, 36% of all 774 participants said that they own digital assets or derivatives. When broken down into smaller categories, the poll indicated that 27% of institutions based in the US had purchased cryptocurrencies. Those included pension funds, investment advisers, digital and traditional hedge funds, and family offices.
It’s worth noting that Fidelity asked the same question last year to 441 institutions based only in the US. At that time, only 22% responded that they own digital assets. In other words, the interest from US-based institutions towards cryptocurrency continues to increase.
“These results confirm a trend we are seeing in the market towards greater interest in acceptance of digital assets as a new investable asset class,” said Tom Jessop, president of Fidelity Digital Assets.
Rather expectedly, over 25% of participants hold the largest cryptocurrency by market cap – Bitcoin. The second-seeded coin Ethereum takes the second spot with 11%. In BTC’s case, the numbers from the 2020 poll have increased substantially compared to the 2019 results. This could be attributed to its performance this year and especially during the COVID-19 pandemic.
Despite Bitcoin plunging to below $4,000 in March, it’s outperforming most traditional financial assets. BTC entered the year at $7,200 and is currently trading at $9,700 – charting year-to-date gains of nearly 35%.
Europe Is More Interested In Crypto
The respondents from Europe in the 2020 survey displayed even higher results. 45% of them noted that they had allocated a portion of their investment portfolios in digital assets.
As such, Jessop concluded that “Europe is perhaps more supportive and accommodating.” He added that this could “be just things going on in Europe right now, you got negative interest rates in many countries. Bitcoin may look attractive because there are other assets that are paying return.”
Negative rates across numerous European countries are indeed an increasing trend, as CryptoPotato reported recently. However, they are also infiltrating countries outside of the Old Continent, meaning that Bitcoin’s role could continue to increase.
Institutional investors also responded that price volatility is the most significant concern hindering Bitcoin from receiving further adoption.
Featured image courtesy of WSJ