Until recently, investment in digital assets, such as crypto-currencies, has been seen as risky. While the price of some digital assets has skyrocketed in the last few years, most people seem reluctant to make a long-term digital investment as a risk associated is also high. However, a recent study conducted by an American multinational financial services provider, Fidelity Investments Inc., has revealed rather surprising results.
According to the survey which included the United States based 411 institutional investors, including but not limited to endowment funds, hedge funds, family offices, financial advisors, foundations and pension funds, at least 22% of surveyed investors have added some form of digital asset into their investment portfolio.
A big chunk of these investments was made only in the last 36 months. The study aimed at projecting the mindset and perspective of investors towards new asset classes.
Fidelity announced results of this survey in a press release on 2nd May, 2019 and it was further revealed that as much as 40% of the survey participants were looking forward to making some kind of digital investments within next five years. This indicates a healthy trend for the market.
An interesting finding in this survey is related to the approach used by digital investors, as only 57% of investors are interested in the direct purchase of digital assets. On the other hand, over 2/3rd of the interested investors are comfortable in buying products which hold crypto assets.
Various reasons, such as lack of understanding of the digital currency market, may be cited for this fact. Tom Jessop, the President of Fidelity Digital Assets, seems hopeful for more institutional investors to engage digital assets for long-term investment as the true potential of Blockchain technology is yet to be realized by the market.
Among the most appealing characteristics of this particular asset class includes the fact that a low correlation exists between traditional asset classes and digital assets; hence, providing an opportunity for investment diversification for institutional investors who usually prefer a diverse portfolio for their investments.
Around half of the participants also termed digital assets as an innovative technological asset class.
A similar joint survey by The Trade Crypto, BitGo and Global Custodian which included participants from the United States, the United Kingdom, and Canada indicated last month that as many as over 90% endowment fund managers are in favor of holding investments in cryptocurrencies.
It is evident from the abovementioned surveys and general perception in the market that digital assets, such as cryptocurrencies, are going to become a mainstream mode of investment and diversification in the near future.