54% of institutional investors in Japan plan to invest in crypto: Survey

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More than half of institutional investors surveyed in Japan expressed intentions to invest in the crypto sector in the next three years.

On June 24, financial services firm Nomura Holdings and its digital asset arm Laser Digital unveiled the results of their survey dubbed the “Institutional Investor Survey on Digital Asset Investment Trends.”

The study approached 547 investment managers, including institutional investors, family offices and public-service corporations.

The survey aimed to uncover Japanese investment managers’ intentions regarding digital assets and highlight their challenges when considering investing in crypto.

Growing interest and positive sentiment

Among the respondents, 54% showed interest in investing in crypto in the next three years. Most managers said they “want to invest” or are “more likely to invest.” The rest answered that they “most likely don’t want to invest” or “don’t want to invest.”

Reasons why investment managers want to invest in crypto. Source: Nomura Holdings

When asked why they wanted to invest in digital assets, the respondents showed that they see crypto as a viable tool for diversifying their portfolio. 60% of respondents view crypto assets as a diversification opportunity.

Meanwhile, other reasons included low correlation to other assets, hedge against inflation, high return potential and crypto’s 24/7 marketplace as their reasons.

Regarding allocation, most managers prefer to allocate 2-5% of their assets to crypto. Within the survey, 66% of the respondents chose 2-5% as their allocation when investing in crypto in the next three years.

Additionally, 25% of those surveyed held a “positive” impression of crypto assets, suggesting an optimistic outlook for the crypto sector’s future in Japan.

Related: Nomura Holdings, GMO Group form stablecoin research partnership in Japan

Drivers and barriers to investment

The researchers also identified key drivers for those already investing or considering getting into crypto. The survey found that the development of crypto exchange-traded funds (ETFs), investment trusts, staking and lending options were highlighted as crucial reasons for considering crypto.

Type of assets that institutional investors prefer. Source: Nomura Holdings

Furthermore, nearly half of the respondents expressed interest in investing in Web3 projects, either directly or through venture capital funds.

The anticipated revision of the Limited Partnerships Act, which would include crypto assets among the assets that Limited Partners (LPs) can acquire, is expected to facilitate these investments.

Conversely, investment managers hesitant to enter the crypto market cited several barriers. Counterparty risk, high volatility and stringent regulatory requirements were their concerns.

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