Professional investors are still keen on crypto but want to see backing from large traditional financial institutions before taking the plunge themselves, according to a survey from Nomura's digital asset arm.
Institutional investor interest in crypto has stalled in recent weeks due to increasing regulatory uncertainty in the United States and its regulatory crackdown on the wider industry.
The Laser Digital Investor Survey conducted in April found that 90% of professional investors polled said it was important to have the backing of a "large traditional financial institution" for any crypto asset fund or investment vehicle before considering putting money into it. Additionally, 96% of respondents regarded digital assets as representing an investment diversification opportunity in addition to traditional asset classes.
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Industry observers predict an increase in institutional investment following the BlackRock spot ETF application. Furthermore, 82% of the professional investors interviewed expressed optimism about the crypto asset class in general over the next 12 months, specifically mentioning Bitcoin (BTC) and Ether (ETH) as the foundation of the Web3 economy and a long-lasting source of investment opportunities.
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Dr. Jez Mohideen, CEO of Laser Digital, highlighted that the study shows institutional investors see a clear role for digital assets in the investment management landscape and the benefits they can bring, such as greater diversification of portfolios. However, around three-quarters of respondents stated that legal or regulatory restrictions could prevent their firms or clients from investing in crypto-related funds or products.
Following the collapse of FTX in November, global regulators have increased scrutiny of the digital asset sector, although many countries are actively rolling out regulations for the new asset class.
Laser Digital conducted an independent global survey with institutional investors across 21 countries in Europe, the Middle East, Asia, South Africa, and Latin America. The survey included over 300 institutional investors with collective assets worth $4.9 trillion, such as wealth managers, pension funds, hedge funds, investment funds, and insurance asset managers.
Nomura established its crypto venture arm, Laser Digital, in September. The Japanese banking giant subsidiary is focusing on Asia for the next crypto industry growth spurt, with regulatory clarity in Japan and Hong Kong expected to boost retail participation, according to Mohideen.
