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Vast majority of institutional investors to invest in crypto by 2026

  • The survey disclosed that the adoption rate of Asia is 71 percent, followed by Europe at 56 percent and the U.S at 33 percent. 
  • Nine out of 10 surveyed institutions admitted that they find the high potential upside and the low correlation of crypto with other assets appealing.

The recent crypto market has been dominated by institutional investors with many of them resorting to the asset class as a hedge against inflation. MicroStrategy was recently reported to have purchased more Bitcoins to take its total portfolio to 100,000 BTC. According to a recent report, institutional investors will continue to move into the crypto market with many of them expected to come on board. 

Based on the results of the survey published by Fidelity Digital Asset, 70 percent of institutional investors plan on buying or investing in digital assets in the near future while 90 percent of them plan to enter the crypto market by 2026. The survey was blindly conducted and considered the views of 1,100 institutional investors across the US, Asia, and Europe.

It was revealed that 52 percent of the surveyed institutions currently invest in digital assets. The survey further disclosed that institutional investors in Asia have significant exposure to crypto compared to the investors in the other regions, though those in Europe and the US are fast catching up. As it stands, the adoption rate of Asia Is 71 percent, followed by Europe (56 percent) and the US (33 percent). 

The reason for the growing crypto interest among institutions was linked to fiscal and monetary measures. Tom Jessop, the president of Fidelity Digital Asset stated: 

The pandemic—and fiscal and monetary measures in response to it—has been a catalyst for many institutional investors to define their investment thesis and operationalize it.

Institutional investors agree that Bitcoin should be part of portfolio

The rising crypto interest discloses that institutions have developed a deeper understanding of the asset class and have “progressed in the three-phase journey from education to adoption.”

In addition, nine out of 10 surveyed institutions admitted that they find the high potential upside and the low correlation of crypto with other assets appealing. 

It was also disclosed that 8 out of 10 institutions agree that Bitcoin should be part of their portfolio. Though this belief is largely shared in Asia, more than three-quarters of institutions in Europe share the same opinion compared to the two-third in the previous year. In the US, 69 percent of surveyed institutions share this belief, a rise from 64 percent in the previous year. 

As the adoption increases, 63 percent of institutional investors are seeking custodians that offer electronic trading, while 56 percent want a custodian that offers market data and analytics, with the US investors making the most calls. 

The main concerns that hinder adoption are the price volatility, market manipulation concerns as well as the lack of fundamentals to gauge the value according to the report. Compared to the previous year, fewer concerns were raised about complexities and market infrastructures. 

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