Fidelity: Institutional investment in cryptocurrency likely to grow

Institutional investment in cryptocurrency is likely to increase over the next five years, according to research from Fidelity Investments.

The firm surveyed 441 institutional investors-including pensions, hedge funds, and endowments-to determine the investment outlook for bitcoin and other cryptocurrencies.

On May 2nd, the firm released research which surveyed 441 US institutional investors, including-pensions, hedge funds, financial advisors, and endowments to determine their outlook on investing in crypto.

If the survey accurately represents institutional interest, this is a remarkable increase from near-zero institutional investment in 2016.

Nearly half of institutional investors view digital assets as having a place in their investment portfolios.

"We've seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments. More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets-new and old-becomes more readily apparent."

The lack of readily available custody solutions means that institutional investors either need to take on excessive risk via self-custody or forgo investing in crypto.

This is one of the issues that Fidelity Digital Assets intends to tackle as an institutional custodian.

Of the different kinds of institutional investors, financial advisors and family offices were the most likely to be receptive towards crypto, with roughly three-fourths of both groups saying they view the characteristics of digital assets "Most favorably."

It seems that as infrastructure and awareness grow in the sector, so too does institutional investment.