Fidelity Digital Assets Eyes Crypto Investments for Pensions
The firm is one of the largest asset managers in the world, with $4.9 trillion in assets under management
May 4, 2024 09:42 AM
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TL;DR A recent report from Fidelity Digital Assets has revealed a growing interest among pension plans, family offices, and high-net-worth individuals in gaining exposure to crypto assets. Traditionally, cautious investors are beginning to explore the crypto market, signaling a significant shift in institutional investment strategies.
Pension plans are beginning to consider crypto assets as a viable investment option. During an event in London, Manuel Nordeste, Vice President at Fidelity Digital Assets, shared insights into the evolving landscape, noting that defined benefit plans and other pension funds are in the early stages of integrating crypto into their portfolios.
This marks a significant shift from their traditionally conservative investment strategies, driven by the need to safeguard future retirees' life savings against the risks of highly volatile and novel assets.
Family Offices Lead the Charge In the early days of Fidelity Digital Assets, one of the largest asset managers with $4.9 trillion and founded in 2018, there was noticeable interest from family offices, specialized asset managers, and hedge funds.
This trend has continued, with small-scale but savvy investors showing a greater inclination towards crypto. Attracted by the potential for high returns and the flexibility of navigating less stringent investment mandates, they are investing in crypto.
"Now, we're starting to have conversations with the larger, real money institutional investor types, and we're getting some of those clients, as well as corporates and so on," Nordeste commented.
Survey Says: High Net Worth Individuals Are Keen on Crypto A survey conducted by Fidelity Digital Assets highlighted that 80% of high-net-worth individuals view crypto positively, with 48% already having invested in digital assets.
In contrast, only 23% of pension plans share this enthusiasm, and a mere 7% have taken the step to invest. This discrepancy underscores the cautious approach of pension funds, prioritizing security over potential high returns.
The Shift Towards Regulated Crypto Products With the introduction of regulated products like spot Bitcoin ETFs, pension funds are slowly increasing their crypto exposure.
Competitors like BlackRock have also recognized this trend, anticipating more institutions entering the Bitcoin spot market through ETF products. Such developments are crucial in providing a more accessible and regulated entry point for traditional investors, thereby bridging the gap between conventional finance and the burgeoning world of cryptocurrency.
