FINTECH: About 33% of pension funds, hedge funds now own digital assets such as Bitcoin.

As published on nairametrics.com, Tuesday 9 June, 2020.

It seems the stake in crypto-assets by institutional investors, is rising by the day, as reports from Bloomberg News, in a survey, done by America’s leading money manager, Fidelity Investments shows a third of large institutional investors owning crypto assets such as Bitcoin.

In Europe and America, 36% of about 774 respondents said they own crypto assets or its derivatives.

In the U.S, 27% of financial institutions like family offices, investment advisers, pension funds, and hedge funds said they own crypto assets, up from 22% this year.

About 25% of the respondent held Bitcoin, while 11% hold Ethereum.

Why institutional investors are now so keen on cryptocurrencies? In a study carried out by Nairametrics using various crypto exchanges data feeds, results show many Pension Funds, Hedge Funds and Family Offices around the world, are increasingly going into crypto assets because of its low correlation to other financial assets, and low-cost transactional charges in executing large trades.

Meanwhile, Bitcoin has increased in value by 36% since the beginning of 2020, and while other traditional financial assets plunged during the Covid-19 pandemic.

“Europe is perhaps more supportive and accommodating,” Tom Jessop, president of Fidelity Digital Assets, said in an interview. “(It could) be just things going on in Europe right now, you got negative interest rates in many countries. Bitcoin may look more attractive because there are other assets that aren’t paying return.”

“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,” Jessop said.

Fidelity declined to comment on the number of customer assets or holdings by institutional groups.