The growing craze of using cryptocurrencies for financial transactions is not limited to the financial technology sector only as most of the institutional investors are also betting high on the digital coins. This trend signifies a remarkable shift in the perception of big investors who are initially supposed to be shying away from investing in cryptocurrencies. The latest research conducted by Greenwich Associates revealed the high level of confidence the cryptocurrency space now enjoys among institutional investors.
Just so you know, the study was conducted with the primary objective of knowing the sentiments of institutional investors about investment in the cryptocurrencies and various digital assets. According to the report, 50% of the total surveyed institutional investors said that it is important to have cryptocurrencies in their investment portfolio; the percentage is quite a good number from the perspective of digital coins adoption. More importantly, however, 22% of the financial institutional investors said that they have already got cryptocurrencies in their investment portfolio which means they have already invested in digital coins.
The research was conducted on behalf of Fidelity Investments, an organization which deals in the domain of assets management. A total number of 440 institutional investors were part of the study and included companies dealing in the investment portfolio, various kinds of pension funds, and hedge funds among others. The interest of the institutional investors directly investing in the digital currency has also got a fillip with 57% of the total respondents confirming this as a preferred medium of investment. Another important statistic reveals that 72% of the respondents are interested in investment in digital coins via the route of purchasing the products linked with digital assets.
Implications of Research
The research has important implications for the cryptocurrency companies as well as policymakers. First of all, despite having a long spell of crypto winter, the enthusiasm and warmth towards cryptocurrencies are still very much prevalent among the institutional investors. This is even more relevant given the fact that the popular belief in this regard is exactly opposite to what the research has found. This is sure to give a boost to the cryptocurrency organizations as they can start making new strategies for stimulating the interest of institutional investors to their fold. This is also going to help in the form of enhancing the retail investment in the crypto market as institutional investors provide credence and credibility to means of investment. Policymakers, too, need to attune their regulatory framework and policies in order to further encourage the institutional investors to invest in digital assets. By improving the investment potential from the institutional investors, both the government and crypto market stand to be benefited. For the government, this could very well open a new revenue mechanism (although it must be done in a careful manner) while for the crypto market, this is going to spread their adoption as well as improving the confidence of the investors in the medium of digital investment.