Even though institutional investment in the crypto market is dwindling, a survey by Fidelity Digital Assets revealed that 70% of institutional investors are still interested in this area in the future.
According to Reuters, citing the Fidelity survey, price volatility is the most significant stumbling hurdle for new participants, followed by a lack of fundamentals needed to judge value and worries about market manipulation.
Price volatility is nothing new in the crypto industry, as shown by the fact that Bitcoin (BTC) lost more than 30% of its value in a single day, plummeting below $30K on May 19 from an all-time high (ATH) of $64.8K in mid-April.
As a result, new institutional investors in the crypto industry are crossing their fingers to watch how price volatility plays out. Meanwhile, over 90% of respondents expect to invest in cryptocurrency in the next five years.
According to the findings of the study:
“Around 90% of those interested in investing in the future said they expected their company’s or their clients’ portfolios to include digital asset investments within the next five years.”
In addition, more than half of the 1,100 institutional investors polled between December and April said they had crypto holdings. Digital and conventional hedge funds, high net worth investors, financial advisors and endowments, and family offices were interviewed.
According to industry researcher Lark Davis, institutions and corporations spent a tiny percentage of their overall cash reserves in the Bitcoin market. He estimated that publicly traded firms had a cash reserve of about $10 trillion, with nearly $6 billion invested in Bitcoin. Therefore, out of the 41,000 publicly traded companies, less than two dozen had taken positions in BTC.