One of the big worries surrounding the growth of the crypto space is that there is allegedly a lack of institutional investors, but according to the latest data from Fidelity Investments, this may not necessarily be the case.
Fidelity: Most Institutional Investors Own Digital Currency
According to the financial firm, roughly 36 percent of institutional players own crypto investments, and most of them own bitcoin, which remains the most popular digital currency. It is widely stated by enthusiasts and analysts everywhere that crypto cannot grow without the assistance and the presence of institutional players. To become a mainstream financial space and to become more legitimate, institutional investors must play a role, but many argue that they seek to avoid crypto like the plague.
Why, you ask? One word… volatility. As we all know by now, bitcoin and its altcoin cousins are notorious for their wild price swings. This year, bitcoin went from $10,000 to about $3,800 within the course of one month (between February and March). At press time, it is trading for just shy of $9,800, meaning it has regained much of what was originally lost, but it certainly took its time getting there, and what was the point of putting enthusiasts through so much worry anyway?
Bitcoin is known for jumping up and down in price like there’s no tomorrow. Investors stand to lose as much as they stand to gain, sometimes even more so, which is why so many institutional players have allegedly sought to avoid the crypto space with all their heart, but Fidelity is shedding new light on the attitudes of such individuals and say that many are looking to cash in on the benefits of whatever bitcoin and other digital currencies can offer.
Fidelity conducted a survey based on the information from nearly 800 different financial firms throughout the United States and Europe. Institutional investors include things like family offices, financial advisers, pension funds and hedge funds. According to the research, about 27 percent of institutional players in America own crypto. This is a five percent increase from the mere 22 percent that was recorded in 2019.
In Europe, roughly 45 percent of users hold crypto. The average between both regions is 36 percent, as mentioned before. In addition, about 25 percent of these users hold only bitcoin, while 11 percent own Ethereum. The rest, it would appear, invest in other cryptocurrencies.
The Space Is Getting Bigger
Tom Jessop – president of Fidelity Digital Assets – explained in a statement:
These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class. This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions.
Despite the good news, some financial firms have been hesitant to offer crypto services due to the prospects of market manipulation.