A survey conducted by Greenwich Associates for Fidelity Investments, one of the largest financial services firms in the world with over $7.2 trillion worth of assets under management, has found that nearly half (47%) of institutional investors believe cryptocurrencies are worth investing in.
The survey, conducted between November 26, 2018 and February 8, 2019 included 441 institutional investors in the U.S. and saw the financial services firm gauge how pensions, hedge funds, endowments, and family offices feel about owning cryptocurrencies.
The move comes as it’s building out its Fidelity Digital Assets business, which launched a crypto custody business this year, and further showed that 72% of respondents prefer to buy investment products that hold cryptoasset in them, while 57% would rather invest directly in the crypto market. Notably, 22% of surveyed institutional investors already owned cryptoassets.
Tom Jessop, Fidelity Digital Assets’ president, stated in a press release:
We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional investors like family offices and endowments.
Jessop further pointed out the survey was conducted during a bear market, and that although the cryptocurrency space saw the value of most cryptoasset drop by over 80% throughout 2018, Fidelity “never saw a decline in interest or sentiment during the crypto winter.”
While the number of clients interest in cryptocurrency Fidelity currently has isn’t clear, the firm noted most paint a favorable outlook for the nascent industry. Per his words, Jessop likes the “idea they are scanning the space to look at what’s going on.” He added:
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.
Fidelity Digital Assets’ president added most firms are exploring the crypto space with the “understanding the technology is here to stay.” Despite bitcoin’s performance so far this year, the survey also found volatility is still a top concern for investors.
Per Jessop, however, it will dissipate over time as more firms enter the space and price discovery improves. Adding futures contracts trading to the equation, he says, will be “spreads tighten.”
Other concern institutional investors showed were related to a lack of fundamentals to determine the right price for cryptoasset like bitcoin and ether, and regulatory uncertainty. As CryptoGlobe covered, Fidelity Digital Assets has been invested in the crypto space for months now, as earlier this year it briefly handled the Lightning Network torch, which ended up being a charitable donation.