CRYPTO MOVERS AND PRICES
Crypto is unchanged for the second day in a row. Spot volumes are as depressed as we've seen in the last 12 months at ~35% of a dwindling 30-day average.
CRYPTO STORY OF THE DAY
Yesterday, Fidelity Investments released a survey of what’s broadly described as “institutional investor” participation in crypto. The findings reveal greater interest in the space among the group while continuing to lack conversion from some high-impact segments.
The survey comprised of nearly 800 U.S. and European investors including financial advisors, family offices, crypto and traditional hedge funds, high net worth investors, endowments, and foundations. Roughly half of those with exposure claimed to hold it directly. Futures exposure increased to 22% (from 9% in 2019) of the interest held by participants. Furthermore, of those surveyed, 80% said there was something appealing about digital asset investment.
We don’t find anything particularly surprising about the survey results. The high levels of interest are probably the most positive findings as it conceivably increases the likelihood of more broad participation by different investor segments in rallies. That said, we believe the focus on institutional investors here, and often elsewhere, is too broad.
From our perspective, broad-based institutional adoption of the space pertains to active, generalist asset managers participating in the space as if it was any other global market. The findings seem to suggest that those are some of the least interested parties. While passive long exposure is obviously welcomed, volatility dampening and more consistent fundamental pricing will come from active managers who are barely mentioned in the Fidelity results. As we have maintained, we believe those investors will be more willing to consistently trade the space as a more broad suite of fiat-settled derivatives emerges and as they are educated on alpha opportunities in crypto.