Fidelity Survey Reveals 2020 Market Downturn Was a Catalyst for Institutional Investors

Fidelity Digital Assets Management has released the results from a recently conducted survey in which it profiled as many as 1,100 respondents spanning financial advisors, hedge and venture fund managers, and other high networth individuals across the US, Europe, and Asia. The survey sought to understand the perspective or inclination of this group of investors when it comes to the digital currency ecosystem, particularly amidst periods of uncertain global economic meltdown recorded in 2020.

Per the findings, the advent of the COVID-19 pandemic created such market conditions that come off as a “catalyst for many investors.” The pandemic halted global business activities, and many firms were crippled. The majority of governments stepped up to ease the economic pangs through relief funds that were made possible through the printing of fiat currencies. This in turn spurred the devaluation of national monies, and as such, created a need for money managers and investors to explore a resilient alternative to safeguard their capital.

According to the Fidelity survey, about 44% of the respondents said that events last year increased their likelihood of investing in digital assets, as against the 40% that said the events had no impact. 

Other Highlights of the Survey

About 52% of those surveyed said they are invested in digital assets. European investors recorded a more positive exposure to the digital currency ecosystem when compared to the United States-based investors. The survey result shows that in Europe, 84% of high-net-worth individuals surveyed are invested in digital assets, while in the U.S, there was a 20-percentage point increase in financial advisors surveyed invested in digital assets.

While the surveyed American and European investors recorded a steady growth from 2019, to date, Asian investors surveyed for the first time recorded a higher number of institutional investors when compared to the two. 

Adoption of Digital Assets by Region. Source: Fidelity

“We were not surprised to learn that Asia has the most institutional investors with allocations to digital assets of those surveyed. Historically, Asian investors have had a more positive view of digital assets and were early adopters of more traditional digital payments. For example, in China, a projected 32.7% of point-of-sale payments are made via mobile, double the UK (15.3%) and US (15.0%), according to OMFIF,” the report detailed.

The uptick recorded in the US was attributed to the number of investment vehicles now gaining ground in the region.

“This uptick in adoption via investment products is likely supported by an increase in the number of public trust-structured investment products now available in the US, in addition to an array of private fund offerings issued by managers throughout the past year.”

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