More than 90% of those interested in cryptocurrencies expect the sector to be a long-term bet, it added, with plans to include them in portfolios within the next five years. The figures drawn from a survey conducted earlier this year came ahead of recent crackdowns from regulators on how digital currencies are advertised as well as the operations of companies including Binance.
Fidelity’s survey of 1,100 institutional investors across the US, Europe and Asia was carried out between December and April, a period that ended prior to bitcoin reaching its all-time high of $64,829 that month. The asset manager continues to have “very positive conversations” with institutions including hedge funds, family offices, endowments and pension funds regarding investing in crypto, Tyrer added. Fidelity Digital Assets recently revealed plans to increase headcount by 70% to keep up with demand.
“As the market was moving higher, people who had decided that they were going to make allocations had an urgency to access the marketplace. Given the price action we’ve seen since, there’s definitely less urgency,” said Fidelity’s European head of digital assets Chris Tyrer in an interview with Financial News. Adoption rates of cryptocurrencies among institutions were highest in Asia at 71% during the surveyed period, ahead of Europe at 56% or the US at 33%. This is likely the result of clearer sector regulation in countries such as Japan, Tyrer said, while the EU only issued a draft proposal on cryptoasset treatment last September.
READ Nearly half of young UK investors jump into crypto for first-time bets The data does not reflect how views may have changed following bitcoin’s major price crash to lows of around $30,000 on 19 May — a fall which, two months later, bitcoin and other cryptocurrencies have yet to recover from.
“This is a new, emerging asset class. Regulation is coming and what we tend to see is that the imposition of that regulation is certainly beneficial for adoption levels going forward,” he added. Tyrer said that conversations with Fidelity clients have not yet yielded concerns about the ongoing regulatory crackdown on retail crypto participation, such as the spate of global warnings against digital asset exchange Binance.
READ Binance crackdown highlights regulatory crypto conundrum “Bitcoin is obviously the highest market [capitalisation] cryptoasset that we have and that is, therefore, the focus of learning as people enter the space. It’s a natural progression from there that people start to look outside,” he said. Bitcoin remains the most popular cryptocurrency for Fidelity clients, though over time, attention has drifted towards other emerging assets. Around 98% of conversations with clients 12 months ago would have been “exclusively about bitcoin”, Tyrer said, but interest in Ethereum-based tokens is now picking up.
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