Fidelity Investment has revealed that it conducted a survey in which it discovered that roughly one-third of all major institutions across the world have invested in cryptocurrencies.
Fidelity involved 774 major firms from all over the world. It found out that roughly 36% of them had invested in cryptocurrencies or cryptocurrency derivatives. 441 institutions involved in the study were from the U.S, and 27% of them had invested in digital currencies this year. This is a slight jump from 22% in 2019. Across the pond in Europe, roughly half of the institutions were exposed to digital assets.
It was no surprise that a substantial number of institutions have invested in Bitcoin since it is the most common cryptocurrency. More than 25% of all the institutions own Bitcoin (BTC), while the next most popular cryptocurrency was Ether (ETH), with roughly 11% of the institutions investing in it. Interestingly, about 60% of the firms that have invested in digital currencies have done so through the spot markets. While the remaining 40% chose to invest in cryptocurrency derivatives.
“These results confirm a trend we are seeing in the market towards greater interest in and acceptance of digital assets as a new investable asset class,” stated Fidelity executive Tom Jessop.
Why are institutions more interested in cryptocurrencies now more than ever?
This year has been quite challenging or many institutions, especially due to the coronavirus, which caused a huge economic fallout across the globe. This has affected all types of businesses, from small ones to major corporations in one way or the other. The resulting economic downturn and economic uncertainty negatively affected the performance of many currencies across the world.
Investors and institutions have thus been shifting their wealth into assets that were immune to the economic downturn. Cryptocurrencies happen to be among those assets. This explains why more institutions have embraced digital currencies this year as they aim to protect their wealth from poor and corrosive economic performance.
Institutional interest in cryptocurrencies may also have something to do with the fact that there is widespread knowledge about digital currencies now than ever before. Firms are thus more confident in chartering cryptocurrency territory in the hopes of getting a piece of the proverbial pie.