According to a study by Fidelity’s cryptocurrency company, seven out of ten institutional investors plan to invest in or buy digital assets in the future, despite price volatility being the biggest hurdle for new entrants.
Between December and April, more than half of the 1,100 institutional investors surveyed by Coalition Greenwich on behalf of Fidelity Digital Assets claimed they had digital asset investments.
According to the study, nearly 90% of individuals interested in investing in the future expect their company’s or clients’ portfolios will incorporate digital asset investments within the next five years.
This included direct bitcoin investments as well as exposure to cryptocurrency companies through stocks or other investment vehicles.
High-net-worth individuals, family offices, digital and traditional hedge funds, financial advisors, and endowments were among those polled.
Fidelity Digital Assets, a cryptocurrency division of Boston-based Fidelity Investments, was founded in 2018 and provides institutional investors with custody and execution services for assets such as bitcoin.
The company was one of the first mainstream financial services companies to embrace cryptocurrencies, which have attracted a growing number of major financial institutions.
TP ICAP the world’s biggest inter-dealer broker, late last month said it was launching a cryptocurrency trading platform with Fidelity and Standard Chartered’s digital assets custody unit.
Despite the mainstream interest, cryptocurrency prices and trading volumes have slumped. Bitcoin has fallen around 50% since its high in April.
The firms surveyed cited price volatility as the biggest obstacle for new investors, followed by the lack of fundamentals needed to assess value and concerns around market manipulation.
In a survey last month JPMorgan Chase & Co, found only 10% of institutional investment firms trade cryptocurrencies, with nearly half labeling the emerging asset class as “rat poison” or predicting it would be a temporary fad.