Digital Currency Revolution Series: Fidelity Research Indicates Institutional Investment Growth Into Cryptocurrencies

Of late, the perception towards cryptocurrencies is sensing paradigm shift after last year’s bearish rout. Almost 50% of the respondents to a recently released Fidelity’s survey (on May 2ndto be precise) have lauded cryptos as “innovative technology,” and perceived crypto’s low correlation to other assets like its “most appealing characteristic.”

Well, as per the research from Fidelity Investments, the institutional investment in cryptocurrency avenue is also most likely to surge in the next couple of years. Fidelity Investments is the world’s fifth-largest asset manager with $2.5 trillion in assets under management.

The reputed investment company surveyed 441 institutional investors—including pensions, hedge funds, and endowments—to determine the investment outlook for bitcoin and other cryptocurrencies. 

Furthermore, about 22% of institutional investors already have some exposure to digital assets, with most investments having been made within the past three years, as per the study. 

In the case of the survey’s accuracy of institutional interest, the commendable surge from near-zero institutional investment in 2016 is going to be a really promising thing for crypto-industry.

Most importantly, the key inferences indicate institutions are prodigiously conducive about the alluring characteristics of crypto-assets. About 7 out of 10 respondents perceived certain properties of digital assets as alluring. 

• Nearly half of respondents (47%) appreciate that digital assets are an innovative technology play 
• 46% find digital assets’ low correlation to other assets among the most appealing characteristic 
• Financial advisors (74%) and family offices (80%) view the characteristics of digital assets most favorably 
• As an alternative investment option, the survey indicates that institutions prefer (72 percent) purchasing investment products that hold or represent digital assets

Well, if opinion remains intact, then that implies institutional investors likely to increase by up to 18 percent over the next five years. Additionally, nearly half of institutional investors (47 percent) foresee digital assets as an alluring option in their investment portfolios.

Tom Jessop, the president of Fidelity Digital Assets, the firm’s crypto division, says: “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.”

The institutional Bitcoin trading volumes have moved into growth for the 4thconsecutive month, as per the other reports of renowned cryptocurrency data outlet ‘Diar’ also. 

The current volume spikes more than 9 percent more compared to December 2018.

Amid mounting crypto interests of institutional investors, the other financial services giants have reportedly begun working with the "mainstream" crypto hedge funds. Northern Trust’s efforts of exploring in new blockchain offerings for private equity, crypto hedge funds followed by JPM’s blockchain initiatives are also center of attraction.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -19 levels (which is mildly bearish), while hourly USD spot index was at 123 (highly bullish) while articulating (at 07:18 GMT). 

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