Alexandra Semenova of Yahoo Finance reports that a majority of hedge fund investors and professional portfolio managers now view cryptocurrencies as legitimate assets.
AKIKO FUJITA: Well, institutional investors are increasingly looking to get into crypto trading. A new survey pointing to a surprising number of investors adding to their exposure in the space. We have our own Alexandra Semenova who studies for us the evolution of the attitudes of these investors. And one of the interesting things for me is pension funds and how they’ve added more crypto to their balance sheets, but of course that’s not the only thing we’re talking about. ALEXANDRA SEMENOVA: Yes, that’s right, Akiko. More and more big money managers are finally starting to take crypto seriously. A majority of institutional investors see a role for digital assets in their portfolios. That’s according to a new survey by London-based crypto hedge fund Nickel Digital. 84% of survey respondents indicated that they believe crypto will become mainstream. This is based on responses from 200 institutional investors around the world, including pension funds, asset managers and wealth managers. And we’re certainly seeing a lot of anecdotal evidence of that lately. Goldman Sachs earlier this month became the first major US bank to trade crypto over-the-counter. You have Ray Dalio of Bridgewater Associates reportedly looking to invest in a crypto fund. And then BlackRock reportedly intends to offer a cryptocurrency trading service to its investor clients. That’s just to name a few. So some of these companies that may have once ignored crypto are now really changing their minds about digital assets. Brian, Akiko. BRIAN CHEUNG: Alexandra, I mean, I guess the natural question, why this change in attitude? Have people all of a sudden watched one of those Tom Brady Super Bowl crypto ads and felt compelled to get in? Why this sudden change? ALEXANDRA SEMENOVA: You know, that could be it, Brian. Many institutional investors still believe that crypto is in its infancy. But, you know, the demand they have from their investor clients compels them to enter the space. One of the main reasons that responded to this survey and said that they see, you know, a mainstream future for listed crypto, is that they see the role of digital assets as, you know, as providing portfolio diversification benefits. And then another interesting point that BlackRock CEO Larry Fink made recently in his letter to shareholders is that he thinks the Russian-Ukrainian war will actually accelerate the use of cryptocurrencies. This is, of course, a huge change in tone from 2017, when he actually called Bitcoin nothing more than a money laundering index. So this rapid rise in Bitcoin’s popularity is forcing their hand now. And then the additional geopolitical and economic uncertainties are growing reasons for more professional investors to start considering crypto as a possible diversification option for their portfolios.