The narratives „digital gold“ and „uncorrelated asset“ have been circulating in Bitcoin Space for years. Especially in recent months, more and more institutional investors seem to be discovering these characteristics of Bitcoin for themselves. From many areas one can hear that more and more institutions are relying on BTC and are integrating it into their portfolios to a certain percentage. This is shown not least by the massive amounts of BTC that Grayscale is buying or the fact that Paul Tudor Jones has invested in Bitcoin. A new survey by the financial house Fidelity now shows the full extent of this development and opens up new perspectives.
A survey with weight
All statements in this article refer to a survey conducted by Fidelity Digital Assets, which you can read about here. Fidelity Digital Assets is a subsidiary of Fidelity Investments, which manages USD 2.46 trillion and has been named the third most influential company in the world by ETH Zurich in 2011.
The survey contains many interesting findings but, according to Fidelity, can be summarised as „a growing number of institutional investors believe that digital assets [like Bitcoin] should be part of their investment portfolios“.
Specifically, the survey was conducted between 18 November 2019 and 6 March 2020 among 774 institutional investors, 393 of whom were from the US and 381 from Europe. The respondents were “ financial advisors, family offices, pensions, crypto and traditional hedge funds, high
wealthy investors, as well as foundations and gifts“.
One in three already invest in Bitcoin
Besides the fact that 80% of investors think that the asset class has „something appealing“ and 60% think that „digital assets like Bitcoin could have a place in their investment portfolios“, another result is even more interesting.
According to the Fidelity survey, 36% of institutional investors are already invested in Bitcoin and Co. More precisely, this is 27% in the USA and a full 45% (!) in Europe. Therefore there are big differences between the continents. Moreover, the share of already invested in the USA rose from 22% in 2019 to the 27% mentioned this year. Fidelity also writes, how could it be otherwise:
Bitcoin is still the digital asset of choice with over a quarter of respondents; 11% have exposure to Ethereum.
Bitcoin and the interesting properties
As mentioned above, 80% of the institutional investors surveyed find that digital assets like Bitcoin have something appealing. Here Fidelity has identified 3 characteristics in particular that are most appreciated:
uncorrelated to other asset classes (36%)
an innovative technology game (34%)
high upside potential (33%)
Nevertheless, there are also some criticisms and concerns of investors:
Price volatility (53%)
concerns about market manipulation (47%)
Lack of a basis for estimating a reasonable value (45%)
As legitimate as these concerns are, it is possible that they will disappear as Bitcoin adoption increases. So writes Fidelity:
Investor concerns are largely focused on issues that will resolve themselves as the market infrastructure develops.