Fidelity: US Pension Funds Explore Crypto And Bitcoin, Eyeing $10 Trillion AUM

According
to
a
recent
survey
by
Fidelity
Digital
Assets,
institutional
investors,
including
US
pension
plans,
are
increasingly


inclined
to
invest

in
crypto
assets,
including
Bitcoin. 

The
survey
covered
various


institutional
investor

segments,
including
financial
advisors,
family
offices,
hedge
funds,
endowments,
foundations,
and
pension
funds. 

Institutional
Investors
Dominate
Crypto
Adoption

The
survey


findings

indicate
a
significant
surge
in
institutional
interest
in
crypto
assets.
Of
the
total
respondents,
74%
expressed
their
intention
to
buy
or
invest
in
digital
assets
in
the
future,
a
slight
increase
from
71%
in
the
previous
year. 

Notably,
US
high-net-worth
investors
showcased
a
substantial
rise
in
their
preference
for
crypto
assets,
with
future
interest
surging
from
31%
to
74%
year
over
year.

Despite
the
positive
sentiment,
the
survey
also
illuminated
the
concerns
and
barriers
faced
by
institutional
investors.


Price
volatility

emerged
as
the
most
significant
obstacle,
with
50%
of
respondents
citing
it
as
their
primary
concern. 

Other
key
concerns
included
the
lack
of
fundamentals
to
gauge
appropriate
value
(37%),
security
issues
(35%),
market
manipulation
(35%),
and
regulatory
classification
of
certain
coins
as
“unregistered
securities”
(33%).

The
survey
highlighted
a
notable
shift
in
perception
among
institutional
investors.
Investors
in
the
US
and
Europe
reported
increased
familiarity,
improved
perception,
and
a
higher
number
of
crypto
asset
investments.
Europe
has
caught
up
with
Asia
in
terms
of
overall


adoption

and
positive
perception,
while
the
US
still
lags
behind.

In
terms
of
specific
investor
groups,
high-net-worth
investors,
crypto
hedge
funds/venture
capital
firms,
and
financial
advisors
exhibited
the
highest
adoption
rates
and
consideration
of


digital
assets. 

This
higher
adoption
may
be
attributed
to
the
organizational
structures
and
investment
decision-making
policies
of
these
groups.
On
the
other
hand,
family
offices,
pensions/defined
benefit
plans,
traditional
hedge
funds,
and
endowments
and
foundations
showed
lower
levels
of
adoption.

Bitcoin
ETFs
Garner
Strong
Interest

The
survey
also
explored
the
features
of
digital
assets
that
institutional
investors
find
most
appealing.
The
potential
for
high
upside,
the
opportunity
for
innovative
tech
investments,
and
the
enablement
of


decentralization

were
cited
as
the
most
attractive
aspects. 

Additionally,
participation
in
decentralized
finance
(DeFi)
and
yield
opportunities
gained
more
attention
compared
to
the
previous
year,
while
concerns
about
lack
of
correlation
decreased.

The
study
suggests
that
institutional
investors
in
Europe
and
Asia
are
more
accepting
of
digital
assets
in
their
portfolios
than
their
US
counterparts.

Ultimately,
Bitcoin


exchange-traded
funds

(ETFs)
and
multi-digital
asset
funds,
both
actively
and
passively
managed,
emerged
as
the
most
appealing
products
among
surveyed
investors.
European
respondents
also
expressed
interest
in
digital
asset
interest
accrual
offerings.
Fidelity
Digital
Assets
also
expressed
the
following: 

The
increased
adoption
reflected
in
the
data
speaks
to
a
strong
first
half
of
the
year
for
the
digital
assets
industry.
While
the
markets
have
faced
many
headwinds
in
recent
months,
we
believe
that
digital
assets
fundamentals
remain
strong
and
that
the
institutionalization
of
the
market
over
the
past
several
years
has
positioned
it
to
weather
recent
events.
Institutional
investors
are
experienced
in
managing
through
cycles,
and
the
largely
inherent
factors
that
they
cited
as
appealing
in
this
study
will
likely
remain
as
the
market
emerges
from
this
period.

As
of
now,
the
largest
cryptocurrency
on
the
market,
Bitcoin,
has
regained
the
$60,500
threshold
after
a
steep
drop
of
almost
20%
from
its
all-time
high
of
$73,700
on
March
14
to
$56,000
on
Wednesday.

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