Despite the evaporation of institutional investment in the cryptocurrency market, a Fidelity study shows 70% of institutional investors eyeing the cryptoactive market.
Price volatility is considered the biggest hurdle for new entrants, followed by the lack of fundamentals needed to assess value and concerns around market manipulation, accordingly with Reuters, citing the Fidelity study.
However, price volatility is not new to the cryptocurrency market, as evidenced by the fact that Bitcoin (BTC) lost more than 30% of its value in a single day to hit $30,000 lows on May 19 an all-time high (ATH) price of $64.8K recorded in mid-April.
This therefore shows that new institutional investors in cryptospace are keeping their fingers crossed to see how price volatility plays out. Meanwhile, about 90% are eyeing investments in cryptoactives over the next five years.
The study noted:
“Around 90% of those interested in investing in the future said they expected their company’s or its clients’ portfolios to include investments in digital assets over the next five years.”
In addition, more than half of the 1,100 institutional investors surveyed between December and April disclosed that they have investments in cryptocurrency. Respondents included digital and traditional hedge funds, high net worth investors, financial advisors and grants and family offices.
Market analyst Lark Davis recently stated that the amount invested by institutions and companies in the BTC market was a small percent of their total cash reserve. He noted that publicly traded companies had about 10 trillion in cash reserves, of which nearly 6 billion was invested in Bitcoin. Therefore, of the 41,000 publicly traded companies, less than two dozen took positions at BTC.