Pension plans are slowly warming up to the idea of investing in crypto assets, according to Manuel Nordeste, vice president at Fidelity Digital Assets. He mentioned that defined benefit plans and other pension funds are just beginning discussions with their investment committees about crypto assets.
Nordeste highlighted that small-scale yet sophisticated investors such as family offices and high-net-worth individuals are more actively involved in crypto investments.
Reflecting on Fidelity Digital Assets’ beginnings in 2018, Nordeste noted the initial interest from family offices, specialized asset managers, and hedge funds, followed by larger blue-chip hedge funds.
He added, “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.”
In a recent survey conducted by Fidelity Digital Assets across the broader market, it was found that 80% of high-net-worth individuals hold a positive view of digital assets, in contrast to only 23% of pension plans.
Furthermore, 48% of these individuals are currently invested in digital assets, whereas only 7% of pension plans have ventured into this realm.
Investor optimism towards digital assets, including Bitcoin, has surged in both the U.S. and Europe compared to last year.
Now, perceptions of digital assets overall stand on equal footing with Bitcoin, each garnering a positive outlook from 51% of surveyed investors. This marks a notable shift, as Bitcoin held a more favorable perception in 2021.
Despite a significant portion (94%) of public pension plans having invested in cryptocurrency, according to a 2022 survey, American retirees largely escaped the brunt of the 2023 market downturn.
This suggests a potential shift in perception, with cryptocurrency possibly being viewed as a long-term store of value, similar to gold.
Smaller firms, as highlighted by Nordeste, exhibit greater agility and risk-taking ability due to their flexible investment mandates, or sometimes, the absence thereof. This stands in stark contrast to pension plans, where stringent mandates often slow down decision-making processes and market entry.
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