One-Third of Institutions Have Invested in Crypto Says Fidelity

A Fidelity survey of 774 institutional investors found that more than one-third of firms worldwide have invested in digital assets or derivatives.

While 36% of institutions own crypto globally, multinational financial services company  Fidelity found that only 27% of the 441 U.S. institutions surveyed are exposed to crypto — although that’s up from 22% last year. Close to half of European institutions are long on virtual assets.

Bitcoin (BTC) is the most popular cryptocurrency investment, with more than a quarter of respondents holding BTC, while 11% of firms own Ether (ETH).

Fidelity commissioned Greenwich Associates to conduct the survey from November until early March — with the data reflecting the crypto positions of firms as of before the violent ‘Black Thursday’ crash that saw crypto prices drop by 50% or more.

Institutions prefer spot to derivatives

More than 60% of institutions who are exposed to crypto have purchased on the spot markets, with the other 40% opting for derivatives. 

While many institutions are yet to pull the trigger on crypto, six in 10 respondents now “believe digital assets have a place in their investment portfolio”. Only 20% of participants indicated that they do not find anything about the crypto asset class appealing.

Fidelity’s Tom Jessop stated: “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.” 

Looking five years into the future, 91% of respondents indicated that they expect at least 0.5% of their portfolio to comprise crypto assets.

Institutional appetites for crypto surge

In early May, billionaire hedge fund founder Paul Tudor Jones indicated that his Tudor BVI fund may hold a low single-digit percentage of its portfolio in BTC, stating: “The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.”

Over recent months we have also seen Grayscale’s Bitcoin Investment Trust aggressively ramp up its BTC accumulation — going from absorbing at a rate equal to 33% of newly mined Bitcoin during the first quarter of 2020 to roughly 1.5 times the rate of new supply since the halving.