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Despite the bear market, crypto continues growing as its adoption rate increases

The digital asset institutional investment scene is not too gloomy according to Fidelity Digital Assets' research

Shashank Bhardwaj
Published: Oct 28, 2022 06:32:20 PM IST
Updated: Oct 28, 2022 06:40:33 PM IST

Despite the bear market, crypto continues growing as its adoption rate increasesImage: Shutterstock

On October 27, Fidelity Digital Assets published its yearly analysis of institutional investment in digital assets.

Fidelity observed that the adoption of digital assets increased by 9 percent and 11 percent, respectively, in the United States and Europe to 42 percent and 67 percent, in its study of 1,052 institutional investors in Asia, Europe, and the United States.

Despite a minor dip in adoption, Asia continued to lead the world with 69 percent. This indicates that despite challenges, the fundamentals of digital assets are still solid, and investor acceptance is still very unequal.

One of the highest increases in future intentions was seen in the US high-net-worth investors, who want to buy or invest in digital assets by 74 percent, up from 31 percent a year earlier.

That indicator increased from 71 to 74 percent overall. According to Tom Jessop, president of Fidelity Digital Assets, in the report, "Institutional investors are experienced in managing through cycles, and the largely inherent factors that they cited as appealing in this study will likely remain as the market emerges from this period."

The wide disparity in adoption among different investor types may be the report's most startling result. Family offices, pensions/defined benefit plans, traditional hedge funds, endowments, and foundations do not exhibit the same affinity for digital assets as high-net-worth investors, crypto hedge funds/venture capital, or financial advisors.

As a result, while 82 percent of high-net-worth investors "current buy/invest in digital assets," traditional hedge funds and pension funds only account for 7 percent and 5 percent of those investments, respectively.

Fidelity is a big proponent of crypto. To reach its goal of 500 employees by the end of the first quarter of 2023, Fidelity Digital Assets announced 100 additional hires on October 20. It also started the custody and trading of ether, which will start on October 28. Fidelity declared its desire to provide 401(k) retirement plans to Americans exposed to Bitcoin in April.

A division of Fidelity Investments, Fidelity Digital Assets is committed to developing products and services that support the institutional adoption of digital assets. A full-service enterprise-grade platform for safeguarding, trading, and maintaining digital assets, along with investment management tools, is one of its businesses.

Fidelity Digital Assets, founded in 2018, combines the operational and technical skills of one of the world's largest and most varied financial services companies with deep and focused blockchain experience to create a unique offering for institutional investors.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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