Notably, the year’s first half saw the worst crypto winter period ever recorded in the industry’s history. The market entered a state of crisis as a result of Terra’s collapse, as well as the failure of a few crypto-related companies. However, according to an analysis by Fidelity Digital Assets, the fundamentals of cryptocurrencies were unaffected by the bearish trend.
The company studied the cryptocurrency market from an institutional standpoint. The analysis indicates that the cryptocurrency market has completely restructured itself to withstand the effects of macroeconomics it has recently encountered. Fidelity Digital Assets President Tom Jessop responded to the study. He claims that despite the storm, the fundamentals of digital technology have survived.
He added that the cryptocurrency market’s institutionalization over time had strengthened it so it could resist recent effects. In Jessop’s opinion, institutional investors demonstrated how they have scaled over various market cycles. He said that as the market transitioned out of the bearish phase, the market’s appealing qualities remained relevant.
About 1,052 professionals from various firms participated in the research’s initial half-year survey. As a result, it clarified the different levels of investor adoption of cryptocurrencies. The survey found that institutional investor adoption was higher in some areas than last year. A 42% and 67% increase was seen in the US and Europe, respectively. Institutional investors in Asia experience a slight decline.
However, the aggregate results showed that, with a 69% allocation, they had the highest adoption of crypto assets. High-net-worth investors, venture capitalists, financial advisors, and crypto hedge funds were the investment types most likely to adopt and consider cryptocurrencies. Endowments and foundations, pension plans, family offices, and conventional hedge funds are among the investors who support adoption on a smaller scale.
Earlier this month, Fidelity Digital announced that it would offer Ethereum trading options for its institutional market. Institutional investors also identified a few compelling characteristics in the Fidelity Digital analysis. The most attractive ones to those surveyed are technological innovation, decentralization, and large potential benefits.
The fifth most appealing aspect, according to the investors surveyed, is that cryptocurrency has no association with other assets. But this year, there has been a strong link between the crypto markets and IT stocks. The study also looked at investors’ intentions to buy or sell cryptocurrencies. It was noticed that significantly more participants (74% vs. 71% from the previous year) still had such goals.
The value is impressive, given that 2021 was bullish and 2022 has seen a bearish market for digital assets.