{"id":103529,"date":"2019-05-02T18:46:45","date_gmt":"2019-05-03T01:46:45","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=103529"},"modified":"2019-05-02T18:46:45","modified_gmt":"2019-05-03T01:46:45","slug":"fidelity-institutional-investment-in-cryptocurrency-likely-to-grow","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/fidelity-institutional-investment-in-cryptocurrency-likely-to-grow\/","title":{"rendered":"Fidelity: Institutional investment in cryptocurrency likely to grow"},"content":{"rendered":"<p>Institutional investment in cryptocurrency is likely to increase over the next five years, according to <a href=\"https:\/\/www.fidelity.com\/bin-public\/060_www_fidelity_com\/documents\/press-release\/institutional-investments-in-digital-assets-050219.pdf\">research<\/a> from <a href=\"\/companies\/fidelity\">Fidelity Investments<\/a>. The firm <a href=\"https:\/\/www.fidelity.com\/bin-public\/060_www_fidelity_com\/documents\/press-release\/institutional-investments-in-digital-assets-050219.pdf\">surveyed<\/a> 441 institutional investors\u2014including pensions, hedge funds, and endowments\u2014to determine the investment outlook for bitcoin and other cryptocurrencies.<\/p>\n<p>Fidelity Investments is the world\u2019s fifth-largest asset manager with $2.5 trillion in assets under management. On May 2nd, the firm released <a href=\"https:\/\/www.fidelity.com\/bin-public\/060_www_fidelity_com\/documents\/press-release\/institutional-investments-in-digital-assets-050219.pdf\">research<\/a> which surveyed 441 US institutional investors, including\u2014pensions, hedge funds, financial advisors, and endowments to determine their outlook on investing in crypto.<\/p>\n<h2>Institutional Investors Looking to Invest<\/h2>\n<p>Based on results from the survey, 22 percent of respondents have already purchased cryptocurrency. If the survey accurately represents institutional interest, this is a remarkable increase from near-zero institutional investment in 2016.<\/p>\n<p>More promising is that four out of ten respondents are open to future investments in cryptocurrency within the next five years. If opinion remains unchanged, this means that institutional investors could increase by up to 18 percent over the next five years. Additionally, nearly half of institutional investors (47 percent) view digital assets as having a place in their investment portfolios.<\/p>\n<p>The data seems to indicate that institutional interest in bitcoin and crypto is increasing. As said by Tom Jessop, president of Fidelity Digital Assets, the firm\u2019s crypto division:<\/p>\n<blockquote><p>\u201cWe\u2019ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments. More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets\u2014new and old\u2014becomes more readily apparent.\u201d<\/p><\/blockquote>\n<p>Of the different ways to invest, the survey indicated that institutions prefer (72 percent) purchasing investment products that hold or represent digital assets, <a href=\"https:\/\/cryptoslate.com\/wall-street-trades-a-significant-portion-of-the-markets-bitcoin-futures\/\">such as futures<\/a>. Meanwhile, purchasing cryptocurrency directly or buying equity in digital asset-related companies were both favorable to more than half of respondents (57 percent).<\/p>\n<p>Jessop went on to elaborate on how interest among institutions has grown:<\/p>\n<blockquote><p>\u201cVenture investment in the sector continues at a healthy pace, complemented by an increasing number of security token offerings (STOs), and the global regulatory environment remains cautiously constructive. Another indication of a growing ecosystem around digital assets is high transaction activity on the Bitcoin blockchain. Institutions are more aware of these developments now than they were six or twelve months ago, which is a positive sign for continued interest and adoption.\u201d<\/p><\/blockquote>\n<h2>Issues Around Custody<\/h2>\n<p>The bias towards purchasing investment products could represent a different issue in the industry\u2014custody. The lack of readily available custody solutions means that institutional investors either need to take on excessive risk via self-custody or forgo investing in crypto.<\/p>\n<p>According to the survey, 18 percent of respondents use third-party custodians, 13 percent perform self-custody, and 6 percent use non-custodial exchanges.<\/p>\n<figure id=\"attachment_99126\" aria-describedby=\"caption-attachment-99126\" style=\"width: 300px\" class=\"wp-caption alignright\"><a href=\"https:\/\/cryptoslate.com\/fidelitys-institutional-bitcoin-trading-and-custody-solution-live-with-select-clients\/\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-99126\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/03\/fidelity-custody-social-300x158.jpg\" alt=\"\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/03\/fidelity-custody-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/03\/fidelity-custody-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/03\/fidelity-custody-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/03\/fidelity-custody-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-99126\" class=\"wp-caption-text\">Related:\u00a0<a title=\"Fidelity\u2019s Institutional Bitcoin Trading and Custody Solution Live with Select Clients\" href=\"https:\/\/cryptoslate.com\/fidelitys-institutional-bitcoin-trading-and-custody-solution-live-with-select-clients\/\">Fidelity\u2019s Institutional Bitcoin Trading and Custody Solution Live with Select Clients<\/a><\/figcaption><\/figure>\n<p>This is one of the issues that Fidelity Digital Assets intends to tackle as an institutional custodian. According to the firm\u2019s <a href=\"https:\/\/www.fidelitydigitalassets.com\/bin-public\/060_www_fidelity_com\/documents\/FDAS\/custody-in-the-age-of-digital-assets.pdf\">white paper<\/a>, self-custody for institutions is not palpable because of the regulations and legal obligations that large financial institutions must adhere to. As a result, self-custody via hardware wallets is not a feasible option for many of these investors.<\/p>\n<p>Fidelity Digital Assets is working to increase access to bitcoin and other cryptocurrencies by providing the \u201csame level of custodial service expected for other assets, despite the regulatory uncertainty.\u201d<\/p>\n<h2>Institutional Perceptions of Cryptocurrency<\/h2>\n<p>Opinions about cryptocurrency are also changing. Nearly half of the respondents to Fidelity\u2019s survey appreciated crypto as \u201cinnovative technology,\u201d and cited <a href=\"https:\/\/cryptoslate.com\/data-indicates-bitcoin-price-uncorrelated-stock-market\/\">crypto\u2019s low correlation<\/a> to other assets as its \u201cmost appealing characteristic.\u201d<\/p>\n<figure id=\"attachment_96049\" aria-describedby=\"caption-attachment-96049\" style=\"width: 300px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/cryptoslate.com\/data-indicates-bitcoin-price-uncorrelated-stock-market\/\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-96049\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/01\/bitcoin-stock-market-social-300x158.jpg\" alt=\"Data Indicates Bitcoin Price is Uncorrelated with Stock Market\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/01\/bitcoin-stock-market-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/01\/bitcoin-stock-market-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/01\/bitcoin-stock-market-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/01\/bitcoin-stock-market-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-96049\" class=\"wp-caption-text\">Related: <a href=\"https:\/\/cryptoslate.com\/data-indicates-bitcoin-price-uncorrelated-stock-market\/\">Data Indicates Bitcoin Price is Uncorrelated with Stock Market<\/a><\/figcaption><\/figure>\n<p>Of the different kinds of institutional investors, financial advisors and family offices were the most likely to be receptive towards crypto, with roughly three-fourths of both groups saying they view the characteristics of digital assets \u201cmost favorably.\u201d<\/p>\n<p>The outlook towards cryptocurrency wasn\u2019t all positive. Respondents cited price volatility, lack of regulatory clarity, and a \u201clack of fundamentals\u201d all as obstacles to investment. However, it seems that as infrastructure and awareness grow in the sector, so too does institutional investment. And, the trend seems unlikely to stop.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Institutional investment in cryptocurrency is likely to increase over the next five years, according to research from Fidelity Investments. The firm surveyed 441 institutional investors\u2014including pensions, hedge funds, and endowments\u2014to determine the investment outlook for bitcoin and other cryptocurrencies. Fidelity Investments is the world\u2019s fifth-largest asset manager with $2.5 trillion in assets under management. On [&hellip;]<\/p>\n","protected":false},"author":29,"featured_media":103530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fidelity: Institutional investment in cryptocurrency likely to grow<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/fidelity-institutional-investment-in-cryptocurrency-likely-to-grow\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fidelity: Institutional investment in cryptocurrency likely to grow\" \/>\n<meta property=\"og:description\" content=\"Institutional investment in cryptocurrency is likely to increase over the next five years, according to research from Fidelity Investments. The firm surveyed 441 institutional investors\u2014including pensions, hedge funds, and endowments\u2014to determine the investment outlook for bitcoin and other cryptocurrencies. Fidelity Investments is the world\u2019s fifth-largest asset manager with $2.5 trillion in assets under management. 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