Over 50% of Institutional Investors in Japan Eyeing Crypto Sector, Survey Shows
Summary:
A recent survey conducted by Nomura Holdings and Laser Digital reveals that over half of institutional investors in Japan are contemplating investing in the cryptocurrency sector within the next three years. The appeal stems largely from the potential for portfolio diversification. While most prefer a portfolio allocation of 2-5% to crypto, potential hindrances like counterparty risk, high volatility, and strict regulations are areas of concern.
A recent survey revealed that over 50% of institutional investors in Japan are considering an entrance into the cryptocurrency market in the next three years. The survey, conducted on June 24, was a collaborative effort between financial services giant Nomura Holdings and its digital asset division, Laser Digital. The survey, aptly named "Institutional Investor Survey on Digital Asset Investment Trends," had a targeted respondent pool of 547 investment managers, which included institutional investors, family-owned business, and public-service corporations. The main aim was to gain insights into the investment plans of these managers in Japan's crypto market and to pinpoint any potential issues when considering such investments.
The results revealed that 54% of the respondents were considering crypto investments in the coming three years. The majority of the investment managers either "wanted to invest" or were "likely to invest." The remaining managers were either not keen to invest or most likely would not. When questioned on their interest in digital asset investment, the majority felt cryptocurrencies presented a potent tool for investment portfolio diversification. In fact, 60% of the respondents regarded cryptocurrency as a diversification opportunity.
Other factors that piqued interest included the low correlation of crypto assets with other asset types, its potential to act as a defense against inflation, the high returns it could offer, and the ability to trade 24/7. The preferred allocation to crypto for most managers was 2-5%, with 66% of respondents indicating this option. A quarter of the surveyed respondents possessed a positive attitude towards crypto assets, signifying an optimistic future for the crypto market in Japan.
The survey also outlined several triggers for investment in crypto for present and potential investors. These included the advent of crypto exchange-traded funds (ETFs), trusts, staking, and lending options. Approximately half of the respondents are keen on investing in Web3 projects, either directly or via venture capital funds. The possible amendment of the Limited Partnerships Act to encompass crypto asset acquisitions would also simplify the investment process.
However, it wasn't all bullish sentiment. Hesitant managers cited the risk associated with the counterparty, severe market volatility, and strict regulatory barriers as potential challenges for branching into the crypto market.
Published At
6/25/2024 4:31:25 PM
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