Fidelity Investments, one of the world’s largest financial services corporations with more than $7.3 trillion in client assets under its administration, released results of its latest survey, which focused on institutional investors, in a statement. Fidelity says the aim was to “better understand how institutions, advisors, and investors think about digital assets, both overall, and as part of an investment portfolio”.
Results show that most investments made by institutional investors were conducted in the last three years, which is not surprising. Almost a quarter of surveyed subjects (22%) already have some exposure to digital assets, while nearly half of respondents (47%) say that digital assets have a place in their investment portfolios.
“We’ve 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 – new and old – becomes more readily apparent,” said Tom Jessop, president of Fidelity Digital AssetsSM, which provides custody and trade execution services for digital assets to institutional investors.
When it comes to how investors plan to hold these assets in the future, opinions vary. The highest percentage (72%) say that they “prefer to buy investment products that hold digital assets”, 57% “prefer to buy investment products that hold digital assets”, while there is the same percentage of those who “prefer to buy an investment product that holds digital asset companies”.
Out of the subjects and entities which have participated in this survey – pensions, family offices, digital and traditional hedge funds, financial advisors and endowment and foundations – financial advisors and family offices see the characteristics of digital assets most favorably.
Similarly to results of the other surveys, most respondents cited price volatility, lack of clarity in the context of regulation, the limited track record and lack of fundamentals as the main obstacles to digital asset investments.
“There’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them. For example, price volatility, which was a primary concern of survey respondents, may dampen as the underlying custody, trading and financing infrastructure continues to develop in a direction that traditional market participants are familiar with.”
Interestingly, investors would prefer to deal with conventional financial companies (37%) rather than dedicated crypto-focused financial firms (24%). Similarly, as many as 13% of survey participants are doing self-custody over their assets, which is only five percent less than those who use third party custodians.
The survey was conducted by Greenwich Associates, between November 2018 and February 2019, and included as many as 441 institutional investors in the U.S.