Poll: 70% of institutional investors plan to add cryptocurrencies to their portfolios

Price volatility remains the main barrier to the adoption of cryptocurrencies by institutional investors, yet 70% of them expect to invest in crypto-industry projects in the future. This is according to the Fidelity Digital Assets (FDA) study, reported by Reuters.

From December 2020 to April 2021, Coalition Greenwich, commissioned by FDA, conducted a survey of 1,100 respondents. Among them were wealthy investors, family offices, hedge funds, financial advisers and endowments. More than half of the respondents said they had invested money in digital assets.

Around 90% of the investors who expressed interest in cryptocurrencies said that, within the next five years, innovative financial instruments would enter the portfolios of their companies or clients.

They see direct purchases of cryptocurrencies as well as investments in industry bodies and other vehicles.

Respondents stressed that price volatility of cryptocurrencies is the main barrier to attracting new investors to this market. Among other problems they cited the lack of fundamental data necessary to evaluate asset values and market manipulation.

In an interview with Bloomberg, UBS CEO Ralph Hamers also noted the volatility of cryptocurrencies, saying they are still an “unproven asset class.”

«We feel that crypto itself is still an untested asset category,» says UBS CEO Ralph Hamers. He tells @ManusCranny he doesn’t have crypto FOMO https://t.co/WoyYpqfqiQ pic.twitter.com/qIwAIejwx7

— Bloomberg TV (@BloombergTV) July 20, 2021

In 2020, FDA published a similar study. Then the share of respondents owning digital assets was noticeably lower — 36%.

Earlier, Fidelity Investments, in response to institutional demand announced the expansion of the digital assets unit’s staff by 70%.

Recall that JPMorgan’s June survey showed that only 10% of institutional investment companies trade cryptocurrencies. A third of respondents agreed with Warren Buffett’s statement that Bitcoin is “rat poison squared.”

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