The majority of institutions are ready to invest, according to a survey

Japanese investors embrace crypto

Recent insights from a survey conducted by Nomura Holdings and Laser Digital Holdings shed light on the changing attitudes of Japanese institutional investors towards cryptocurrencies.

The survey, which included responses from 547 investment managers across various sectors such as family offices and public benefit corporations, suggests broad adoption of cryptocurrency in these respective fields.

YES to crypto

A striking 54% of these investors expressed their intention to venture into the cryptocurrency market in the next three years, highlighting a move towards diversifying investment portfolios with digital assets.

The results suggest a significant trend towards using cryptocurrencies as speculative instruments and as important elements of various investment strategies.

While only 16% of respondents view digital currencies as potential substitutes for traditional base currencies, 62% view them as high-yield investment opportunities.

This perspective highlights a strategic approach to leveraging the unique attributes of digital assets, including their low correlation with other asset classes and their potential to hedge against inflation.

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According to Coinpost, the latest survey from Nomura Securities shows that 54% of institutional investors in Japan plan to invest in cryptocurrencies in the next three years. The main motivation is to diversify investments and fight inflation. If the cryptocurrency ETF is raised in…

-Wu Blockchain (@WuBlockchain) June 25, 2024

According to the survey, most investors considering adding digital currencies to their portfolios intend to dedicate between 2% and 5% of their assets under management to them. These investments are viewed with a minimum horizon of one year, indicating a cautious but optimistic approach to this emerging asset class.

Besides direct investments, there is notable interest in crypto-related activities such as staking, mining, and lending, which more than half of investors are exploring.

However, the crypto journey is not without its challenges; Key obstacles include the lack of established fundamental analysis methods, high volatility, and concerns about counterparty risks.

Japanese regulatory position

On the regulatory front, Japan appears more accommodating than its regional neighbors, such as China. Recent developments have shown a proactive stance from Japanese regulators towards the digital currency sector.

In February 2024, a significant policy adjustment allowed venture capital firms and other investment funds to directly hold cryptocurrencies.

The move is part of a broader economic agenda under Prime Minister Kishida’s administration, which aims to “revitalize” Japan’s economy by supporting the growth of Web3 and digital asset companies, according to the report.

Additionally, the potential of crypto ETFs in Japan could further catalyze market activity, with 53% of investors surveyed indicating they would opt for such products if they were available.

The proactive regulatory environment is already having tangible impacts on the market. For example, Metaplanet Inc., a Tokyo-listed company, has taken significant steps in integrating Bitcoin into its treasury assets.

Their initial investment of 1 billion JPY (approximately $6.56 million) in Bitcoin, intended for long-term holding, was followed by an additional purchase of 23,351 BTC on June 11.

Featured image created with DALL-E, chart by TradingView