Despite the dramatic drop in cryptocurrency values last year, according to a new Fidelity Investments poll, around half of institutional investors believe digital assets are worthy of owning in portfolios. Meanwhile, a strategist who properly foresaw Bitcoin’s decline now predicts a long-term rebound in the once-hot market.
From November through February, Fidelity, which launched a Bitcoin storage service for its users this year, polled 441 institutional investors. As the asset management expands its Fidelity Digital Assets division, it hopes to learn how comfortable pensions, family offices, hedge funds, endowments, and foundations are with cryptocurrency ownership.
The Fidelity study was conducted during a bad market for digital assets, which has made a partial rebound in recent months. Bitcoin, the world’s biggest digital currency by market capitalization, has regained about 70% of its value in three months, but it is still more than 70% off its all-time high at $20,000.
What the Fidelity Survey Tells Us About Crypto
- Almost seven out of ten respondents found some aspects of digital assets intriguing.
- 47% believe that digital assets have a place in their investing portfolios.
- 72% prefer to purchase investment products including digital assets, 57% prefer to purchase crypto assets directly, and 57% want to purchase an investment product containing digital asset firms.
- 22% of institutional investors already have some exposure to digital assets, with the majority of investments made in the last three years.
- Four out of ten respondents indicate they are willing to invest in digital assets in the next five years.
Source: Fidelity Investments
Crypto Analyst Says Buy on Weakness
According to the study findings, 57% of institutional investors prefer to acquire digital assets directly, while 72% prefer to buy investment solutions that include digital assets. While the digital currency space has scared away more conservative investors who are concerned about issues such as fraud, market manipulation, and a slew of scandals that have harmed the crypto-claim industry’s to legitimacy, the survey found that 47% of institutional investors believe digital assets are worthwhile to invest in. The same proportion said they “appreciate” bitcoin as a “innovative technological play,” while 46% said the little connection between digital currencies and other asset classes is the most enticing feature.
The Fidelity study, conducted in collaboration with Greenwich Associates, comes as Fundstrat technical analyst Robert Sluymer believes Bitcoin, which is now trading at its highest price in six months, is in the midst of a sustainable rebound. He advises investors to take advantage of recent losses and acquire the digital currency on the cheap.
“Continue to accumulate Bitcoin in the second quarter in expectation of a second-half surge over 6,000 resistance,” said Sluymer in a recent note, as reported by Bloomberg. The market observer sees bitcoin’s recovery from its 200-week moving average as the beginning of a longer-term recovery.
Despite the challenges that the crypto field faces, a shift toward more explicit regulation and backing from large investors should help propel the market into the mainstream. According to Fidelity, 22% of institutional investors are currently exposed to digital assets, and institutional investments in cryptocurrencies are expected to grow over the next five years.
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