54% of Japanese Institutional Investors Eye Future in Bitcoin, Survey Reveals

• Recent insights reveal a significant shift in attitudes among Japanese institutional investors towards cryptocurrency, thanks to a survey by Nomura Holdings and Laser Digital Holdings.
• Responses from 547 investment managers underscore a growing interest in diversifying investment portfolios with digital assets.
• A noteworthy finding from the survey is that 54% of these investors plan to venture into the cryptocurrency market within the next three years.

Japanese institutional investors are gearing up to integrate cryptocurrency into their portfolios, driven by the potential for high returns and diversification benefits.

YES to Crypto

The survey results reveal that a striking 54% of Japanese institutional investors intend to enter the cryptocurrency market within the next three years. This showcases a notable shift toward including digital assets in investment strategies aimed at diversification.

The data indicates that many investors consider cryptocurrencies as both speculative instruments and integral parts of diversified portfolios. Specifically, 62% see these digital currencies as high-return investment opportunities, although only 16% consider them as potential substitutes for traditional currencies.

This shows a growing strategic interest in leveraging the unique benefits offered by digital assets, including their low correlation with other asset classes and their utility as a hedge against inflation.

According to Coinpost, Nomura Securities’ latest survey 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 lifted in…

— Wu Blockchain (@WuBlockchain) June 25, 2024

Further insights from the survey reveal that those planning to add digital currencies to their portfolios typically aim to allocate between 2% and 5% of their assets under management. These investments are eyed with a minimum holding period of one year, indicating a measured and optimistic approach towards this emerging asset class.

Besides direct investments, there is also substantial interest in crypto-related activities such as staking, mining, and lending, with over half of the investors exploring these opportunities.

However, potential challenges remain. Key barriers include the lack of established fundamental analysis methods, high market volatility, and concerns about counterparty risks.

Japanese Regulatory Stance

In terms of regulation, Japan adopts a more supportive stance compared to its regional counterparts, like China. Recent actions by Japanese regulators reflect a proactive approach towards fostering the digital currency sector’s growth.

In February 2024, a significant policy change enabled venture capital firms and other investment funds to hold cryptocurrencies directly. This policy is part of a broader economic plan under Prime Minister Kishida’s government to rejuvenate Japan’s economy by promoting Web3 and digital asset firms.

Moreover, the potential introduction of crypto ETFs in Japan could further stimulate market activity. According to the survey, 53% of investors expressed interest in opting for such products if made available.

The favorable regulatory environment is already making an impact. For example, Tokyo-listed Metaplanet Inc. has integrated Bitcoin into its treasury assets, initially investing JPY 1 billion (approximately $6.56 million) for long-term holding and making an additional purchase of 23.351 BTC on June 11.

Conclusion

In summary, Japanese institutional investors exhibit a growing readiness to invest in cryptocurrencies within the next few years. Despite challenges such as market volatility and analytical limitations, the supportive regulatory landscape and strategic interest in digital assets signal a promising future for cryptocurrency in Japan’s investment portfolios.