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Crypto: 84% of institutional investors see digital assets going mainstream

Yahoo Finance's Alexandra Semenova reports that a majority of hedge fund investors and professional portfolio managers now see cryptocurrencies as legitimate assets.

Video Transcript

AKIKO FUJITA: Well, institutional investors are increasingly looking to get in on the crypto trade. A new survey pointing to some surprising number of investors who are adding to their exposure in the space. We've got our very own Alexandra Semenova who's looking into the shifting attitudes of these investors for us. And one of the interesting things for me is the pension funds and how they have added more crypto to their balance sheet, but of course, that's not the only thing we're talking about. ALEXANDRA SEMENOVA: Yeah, that's right, Akiko. More big money managers are finally starting to take crypto seriously. A majority of institutional investors see a role for digital assets in their portfolios. That's according to a new survey by the London-based crypto hedge fund, Nickel Digital. 84% of respondents to the survey indicated that they believe crypto will become mainstream. This is based on answers from 200 institutional investors around the globe, including pension funds, asset managers, and wealth managers. And we're certainly seeing lots of anecdotal evidence of this recently. Goldman Sachs earlier this month became the first major US bank to trade crypto over the counter. You have Ray Dalio of Bridgewater Associates reportedly looking to invest in a crypto fund. And then BlackRock is allegedly planning to offer a cryptocurrency trading service to its investor clients. That's just to name a few. So some of these firms that perhaps once shrugged crypto off are now really changing their tune on digital assets. Brian, Akiko. BRIAN CHEUNG: Alexandra, I mean, I guess, the natural question, why the changing attitude? Did people all of a sudden just watch one of those Tom Brady's Super Bowl crypto ads and felt like they needed to get in? Why the sudden change? ALEXANDRA SEMENOVA: You know, that might be it, Brian. Many institutional investors actually still believe that crypto is in its early days. But, you know, the demand that they have from their investor clients is forcing them to get in on the space. One of the main reasons that responded to this survey who said that they see, you know, a mainstream future for crypto listed, is that they see the role of digital assets as, you know, as offering portfolio diversification benefits. And then another interesting point that BlackRock CEO, Larry Fink, actually made recently in his letter to shareholders is that he believes that the Russia-Ukraine War will actually accelerate the use of cryptocurrencies. That's, of course, a huge change in his tone from 2017, where he actually called Bitcoin nothing more than an index of money laundering. So this fast rise in the popularity of Bitcoin is kind of forcing their hand now. And then the added geopolitical and economic uncertainties are growing reasons for more professional investors to start eyeing crypto as a possible diversification option for their portfolios.