Majority of Japanese Institutional Investors Plan to Invest in Crypto in Next Three Years: Nomura Survey

• 54% of firms surveyed said they planned to invest in crypto in the next three years.

• A quarter of respondents said they had a positive impression of digital assets.

• The preferred allocation to crypto was between 2%-5% of AUM, investors said.

Nomura (NMR) and its digital asset subsidiary Laser Digital found that over half of Japanese investment managers they spoke to plan to invest in digital assets in the next three years following a survey of institutional investors.

The survey showed that 54% of respondents intended to invest in crypto in the next three years and 25% of firms said they had a positive impression of digital assets.

Crypto was viewed as a diversification opportunity by 62% of those surveyed, together with cash, stocks, bonds and commodities, and many investors view digital assets as an investment asset class, the study said.

The preferred allocation to digital assets was between 2%-5% of assets under management (AUM), investors said, and nearly 80% said they would invest over a year.

The development of new products could boost investment in digital assets. For those already involved in cryptocurrencies or those debating investing in digital assets, the main driver for future investment was the development of new products including exchange-traded funds (ETFs), investment trusts, and staking and lending offerings. The survey showed that about half of respondents would like to invest directly in Web3 projects or via venture capital funds.

Still, barriers to entry are preventing some managers from investing in digital assets. These barriers include counterparty risk, high volatility and regulatory requirements, the study showed.

The bank surveyed 547 Japanese investment managers between April 15 and April 26, including institutional investors, family offices and public-service corporations.