Japan’s largest securities firm, Nomura Securities, and its digital asset subsidiary, Laser Digital, conducted a digital asset investment survey in April of this year on 547 institutional investors in Japan. The results showed that over 54% of institutions stated that they will purchase cryptocurrencies within the next three years, and over 25% have a positive view of cryptocurrencies.
According to Nomura Securities’ survey, 62% of institutional investors believe that cryptocurrencies bring more diversified options to their asset allocation, which is their primary investment driver. Additionally, with the approval of Bitcoin and Ethereum spot ETFs in the U.S. and Hong Kong this year, institutional investors have a wider range of investment options.
Other motivators disclosed by institutional investors include the high return potential of cryptocurrencies, the hedging capabilities of Bitcoin against currency inflation to some extent, the expanding investment and adoption cases of cryptocurrencies by other companies, and the interest in staking, lending, and mining activities in DeFi by those knowledgeable about cryptocurrencies.
However, Nomura Securities also identified factors hindering institutional investors from allocating cryptocurrency assets, including pricing challenges and high volatility of cryptocurrencies. Additionally, legal barriers, lack of cryptocurrency knowledge among institutional leaders, and regulatory risks make it difficult for decision-makers to approve cryptocurrency purchases. Furthermore, the Basel Committee on Banking Supervision’s proposal that banks must adopt a 1,250% risk weight for any unhedged cryptocurrency position poses profitability challenges for banks.