Recent Survey Notes Institutions Preferring Crypto Investments

Amidst institutional investment product trading volumes falling to a two-year low, well almost 60% of investment firms said they were engaged in digital assets in the first half of the year, according to a research carried by Fidelity Investments.

So according to Bloomberg, a Fidelity Investments survey revealed that four in five investors expect their investment portfolios should also include cryptocurrencies, with institutional investors investing in digital assets increasing by 6% year on year.

Despite a much more than 50% decrease in cryptocurrencies price levels this year, the survey indicates that institutions are heating up to digital assets. Fidelity Digital Assets president Tom Jessop was quoted as saying that during the time when the markets are facing heavy economic slowdowns, especially in recent months. 

Jessop added that fundamentals of crypto assets might stay strong. He cited the instance of cryptocurrencies going institutionalized within the market in the past years that have enabled them to face the distress environment. 

The Fidelity study polled over 1,000 institutional investors from the United States, Europe, and Asia. Those investing in digital assets discovered that $BTC and $ETH are their top picks, with Ethereum shareholding in the United States falling 4% year on year.

The organization also discovered that over 65% of survey participants in Asia and Europe owned digital assets, whereas only 42% did in the United States. Those who haven’t yet invested in cryptocurrency cited risks such as volatility, security concerns, and the possibility of market manipulation.

Prominently, institutional investors are continuing to increase their investments in digital assets at a time when the daily aggregated trading volume of institutional cryptocurrency investment vehicles has reached a two-year low.

As per CryptoCompare’s latest Digital Asset Management Evaluation report, digital asset products’ assets under management (AUM) started to recover last month after a “tough September,” with AUM rising 1.76% in October to $22.9 billion as of October 25th.

According to the firm’s research, this is the first growth in AUM since July of this year, and it remains significantly lower than the figure seen during this year’s marketplace peak in March. The average daily aggregate product volumes across all crypto investment products fell 34.1% to $62.3 million in October, continuing a steady decline in volumes that began in November 2021 and only temporarily paused for a 0.39% rise in May.

MicroStrategy-like companies hold the top positions as the institutions with the most crypto holdings. It has become more bullish towards crypto under the leadership of bitcoin evangelist Michael Saylor. The company announced to raise 500 million USD in September 2022 to allocate the funds in crypto buying. By September 2022, MicroStrategy was holding about 130,000 BTC. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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