Some 4 out of 5 institutional investors find "something appealing" about digital assets, but resistance remains when it comes to adopting them, according to a survey released Tuesday by Fidelity Digital Assets.
The research, which was conducted from November to early March and surveyed nearly 800 institutional investors, found that 36% of respondents — 27% in the U.S. and 45% in Europe — are currently invested in digital assets. In 2019, 22% of U.S. investors had allocations to these assets. Moreover, 59% of those currently invested do so directly, up from 55% in 2019. Corresponding European figures were not provided.
"These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investible asset class," said Tom Jessop, president of Fidelity Digital Assets, in a news release. "This is evident in the evolving composition of our client pipeline, which spans from crypto native funds to pensions."
Looking ahead five years, 91% of respondents who are open to exposure to digital assets expect to have at least 0.5% of their portfolio allocated to the asset class. Among U.S. respondents, this number rose to 88% this year from 79% in 2019, the survey found.
Some 6 in 10 institutional investors feel digital assets have a place in their portfolio, though opinions vary on precisely where, the survey said. Nearly 40% of investors believe digital assets belong in the alternative asset class, while 20% of investors believe they belong in an independent asset class.
But while the survey found more interest in digital assets, institutional investors still have their concerns. Among the obstacles to digital asset adoption cited were price volatility (53%), concerns about market manipulation (47%), and lack of fundamentals to gauge appropriate value (45%), according to the survey.
"Investor concerns are largely focused on issues that will resolve themselves as the market infrastructure evolves," Mr. Jessop said.
Fidelity Digital Assets was launched in late 2018 by Fidelity Investments as the first major firm in institutional asset servicing to offer cryptocurrency custody and trade execution operations.