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

Japan’s largest investment bank, Nomura Holdings, along with its digital asset subsidiary, Laser Digital, recently conducted a survey among more than 500 investment managers in Japan. The survey aimed to understand the investment trends and intentions of Japanese investment managers regarding digital assets. Here are the key findings:

The changing environment surrounding digital assets in Japan has prompted investment managers to explore crypto assets. Among those surveyed, 54% expressed their intention to invest in crypto assets over the next three years. This growing interest is driven by various factors, including new product offerings and evolving regulations.

Diversification and Investment Ratios

• Positive Impression: Approximately 25% of respondents reported having a positive impression of crypto assets.
• Diversification Opportunity: A significant 62% view crypto assets as a diversification opportunity within their investment portfolios.
• Preferred Allocation: When investing in crypto assets, the preferred allocation is typically between 2% and 5% of their assets under management (AUM).

Drivers for Future Investment

• Product Variety: Respondents expressed interest in a variety of crypto products, including ETFs, investment trusts, staking, lending, and other innovative offerings.
• Web3 Projects: Nearly half of the surveyed investment managers expressed a desire to invest directly in Web3 projects or through venture capital (VC) funds.
• Legal Changes: The upcoming revision to the Limited Partnerships Act, expected later this year, will allow limited partners (LPs) to acquire crypto assets, facilitating institutional investments.

Barriers to Entry

• Counterparty Risk: Some respondents cited counterparty risk as a concern.
• Volatility: High volatility remains a challenge for potential investors.
• Regulatory Requirements: Regulatory clarity is essential for institutional investors to engage more actively in the crypto market.

As Japan’s digital asset laws and regulations continue to evolve, institutional investors are poised to play a more significant role in the crypto space. The survey results highlight a growing interest in crypto assets among Japanese investment managers, signaling a potential shift in investment strategies.