[NEWS] 54% of domestic institutional investors plan to invest in crypto assets in the next three years, according to a Nomura survey

Nomura Holdings and its subsidiary Laser Digital Holdings AG conducted the "Institutional Investor Survey on Digital Asset Investment Trends 2024" and released the results.

Bitcoin (BTC) and Ethereum (ETH) have risen by 69% since the beginning of the year, and the market capitalization of major cryptocurrencies has risen from less than $800 billion (approximately 128 trillion yen) at the beginning of 2023 to approximately $1.2 trillion (approximately 192 trillion yen).

In Japan, the environment surrounding digital assets is undergoing major changes, such as the development of legal regulations.

In this context, Nomura conducted an online survey of investment managers at institutional investors, family offices, public interest corporations, etc. to understand the investment trends and intentions of domestic institutional investors in digital assets and to clarify the issues that arise when considering investing in crypto assets.

The online survey was conducted from April 15th to 26th, targeting 547 investment managers.

It was found that 54% of respondents intend to invest in crypto assets in the next three years, and 25% have a positive impression of crypto assets (especially Bitcoin and Ethereum). 40% of those with a high level of knowledge have a positive impression of crypto assets, and a correlation can be seen between a high level of knowledge about crypto assets and a positive impression.

In addition, 60% of respondents cited diversification and inflation hedging rather than potential returns as the reason for wanting to invest in crypto assets.

Furthermore, 62% of respondents viewed crypto assets as an opportunity for diversification, similar to cash, stocks, bonds, and commodities, and when investing in crypto assets, the most preferred allocation ratio of AUM (assets under management) was 2-5%. 80% of respondents seem to expect an investment period of one year or more.

The development of various products such as ETFs, investment trusts, and staking is cited as a factor accelerating crypto asset investment.

Regulations and high volatility are barriers

While positive views are growing, not all highly knowledgeable investors seem to be optimistic, as there are few institutional investors who are actually investing.

Currently, the barriers to investing in crypto assets include "concerns about counterparty risk," "high volatility," "lack of an environment that makes it easy to consider and approve investments within the company," and "regulatory bottlenecks."

Of the barriers, many respondents recognized that "regulatory bottlenecks are the biggest." Specific examples of these include "legal regulations, including supervisory guidelines," "tax system," "treatment of crypto assets in capital adequacy regulations," and "concerns about regulatory costs due to reconciliations from regulatory authorities."

The SEC (U.S. Securities and Exchange Commission) has approved spot ETFs for Bitcoin (BTC) and Ethereum (ETH), but this survey revealed that in Japan, too, there is a high demand for investment in fund formats, including exchange-traded funds, rather than direct investment in crypto assets.

53% were interested in exchange-traded funds such as ETFs, and 40% were highly interested in publicly offered investment trusts. In addition, over 50% were interested in income investments such as staking, mining, and lending.

Reference:Survey results
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