Investors want crypto, but not without TradFi backing: Nomura survey

Professional investors are still keen on crypto but want to see backing from large traditional financial institutions before taking the plunge themselves, a survey from Nomura’s digital asset arm has revealed.

Institutional investor interest in crypto has stalled in recent weeks due to increasing regulatory uncertainty in the United States and its regulatory crackdown on the wider industry.

In the Laser Digital Investor Survey conducted in April, 90% of professional investors polled said that it was important to have the backing of a “large traditional financial institution” for any crypto asset fund or investment vehicle before they or their clients would consider putting money into it.

However, a whopping 96% of them regarded digital assets as “representing an investment diversification opportunity” in addition to traditional asset classes such as fixed income, cash, equities, and commodities.

Industry observers have predicted an increase in institutional investment following the BlackRock spot ETF application.

With more accessibility and institutional involvement, the bull’s roar will only get louder.

— Crypto ENTJ (@CryptoEntj) June 16, 2023

Furthermore, 82% of the professional investors interviewed were optimistic about the crypto asset class in general over the next 12 months. They specifically mentioned Bitcoin (BTC) and Ethereum (ETH) with almost half of the respondents regarding the pair as the foundation of the Web3 economy and a “long-lasting source of investment opportunities.”

Dr. Jez Mohideen, CEO of Laser Digital said the study shows that institutional investors see a “clear role for digital assets in the investment management landscape and the benefits they can bring, such as greater diversification of portfolios.”

However, around three-quarters of them said “legal or regulatory restrictions” could prevent their firms or clients from investing in crypto-related funds or products.

Following the collapse of FTX in November, global regulators have come down hard on the digital asset sector but many countries are actively rolling out regulations for the new asset class.

Laser Digital carried out an independent global survey with institutional investors across 21 countries in Europe, the Middle East, Asia, South Africa, and Latin America.

More than 300 institutional investors with collective assets worth $4.9 trillion including wealth managers, pension funds, hedge funds, investment funds, and insurance asset managers were polled.

Nomura established its crypto venture arm Laser Digital in September 2022.

In case you missed it…https://t.co/QFYeKA596L pic.twitter.com/OniCjtxusI

— Laser Digital (@LaserDigital_) October 18, 2022

The Japanese banking giant subsidiary is focusing on Asia for the next crypto industry growth spurt. On June 13, Mohideen said regulatory clarity in Japan and Hong Kong would boost retail participation.

“Asia benefitted from what happened in the US and realized the things they need to avoid,” he said.

Magazine: Korean crypto contagion, Bank of China on Ethereum, HK’s exchange red carpet: Asia Express