TheMerkle Fidelity investments Cryptocurrency mining

22 percent of institutional investors already have exposure to digital assets. This is according to a new report by Fidelity Investments, one of the largest asset managers in the world. The report goes against many crypto skeptics who have been quick to state that institutions are no longer interested in digital assets.

The survey polled 441 institutional investors between November last year and February this year. Interestingly, this was a time in which cryptos hit their lowest levels. Nevertheless, institutional investors remained unfazed, with interest in digital assets never really dwindling.

Tom Jessop, the president of Fidelity’s digital assets division explained, “We never saw a decline in interest or sentiment during the crypto winter.”

The survey revealed that 47 percent of institutional investors view digital assets as “having a place in their portfolios.” The investors, who include crypto funds, also disclosed their preferred investment methodology. 72 percent prefer to invest in digital assets through customized investment products. 57 percent prefer to invest in digital assets directly, with another 57 percent revealing they prefer “to purchase an investment product that contains digital asset companies.”

Clearly, the investors had the option of picking a combination of different methodologies.

Jessop further revealed that cryptos have evolved from their humble beginnings.

We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments

The investors also differ in their perception of digital assets. 47 percent of them view cryptos as an attractive technology. 46 percent are attracted to the low correlation that digital assets have with other assets.

There Are Challenges Still

While the interest in digital assets is still high and rising, there are challenges and concerns that investors share. Jessop explained:

“Institutions are doing the work to develop their own investment theses—but there’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them. For example, price volatility, which was a primary concern of survey respondents, may dampen as the underlying custody, trading and financing infrastructure continues to develop in a direction that traditional market participants are familiar with.”

And it’s not just Jessop who is bullish on cryptos at Fidelity. Abigail Johnson, the Fidelity CEO, has been one of the biggest crypto proponents on Wall Street. According to Bloomberg, she believes that Wall Street’s confidence in Fidelity will play a key part in crypto adoption.

The survey supports Abigail’s assertion. 37 percent of institutions prefer investing in digital assets with a traditional financial firm as opposed to 24 percent who prefer a crypto-focused firm.


Jessop also supported his colleague’s views stating:

People are relying on the institutions they’ve done business with for a long time to fulfill their objectives and needs. I’m not trying to throw shade on anybody else, but it’s up to the clients to decide.

Jessop further pointed out that Fidelity Digital Assets has continued to receive interest from a number of giant Wall Street firms. He explained, “Many of them are approaching it from a different perspective, whether it’s asset allocation, or others looking at the fundamentals like network activity, a more quantitative approach. It’s healthy people bring different analytical lenses to the same subject.”

Image(s): Shutterstock.com