Institutional investors are eyeing crypto

About half of institutional investors consider digital assets to be worthy of holding in portfolios, according to a survey commissioned by Fidelity Investments.

Fidelity, which began a custody service to hold Bitcoin for its customers earlier this year, is trying to gauge how pensions, family offices, hedge funds, endowments and foundations feel about owning cryptocurrencies as it builds its Fidelity Digital Assets business.

According to the survey, which questioned 441 institutional investors from November to February:

• 72 percent prefer to buy investment products that hold digital assets

• 57 percent choose to buy them directly.

“That’s interesting because I’d argue that no one owns dollars or euros in a fund,” Tom Jessop, president of Fidelity Digital Assets, said in an interview.

Survey participants said they were concerned about volatility, regulatory uncertainty and a lack of fundamentals to use in determining the right price for Bitcoin, Ether and other digital assets.

Jessop noted that the survey was done during a bear market in which cryptocurrencies have dropped substantially from their highs in late 2017.

The cryptocurrency market continues to be plagued with fraud, theft and regulatory infractions.

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