FIDELITY INTERNATIONAL
the picture is different with institutional investors , it points to broader challenges within the digital asset space .
Extreme price volatility and the prevalence of crypto scams leave a lingering sense of unease among retail investors towards crypto – something that the past few months have only exacerbated .
“ The level of understanding is still limited ,” Froehlich says about retail investors . “ Bitcoin was launched in 2009 , so some passionate people have had time to explore the concept and make an opinion about that , but most consumers started looking at cryptocurrency around 2020 or 2021 when bitcoin was making all the headlines . In this sense , it has been a relatively short period for people to learn about digital assets . You also need to take a multi-disciplinary approach , from technology to economics , which is time-intensive and takes a while to digest .” Like many trends within the industry , the COVID-19 pandemic has proved to be a catalyst ; some people spent lockdown baking bread , while others got to grips with the mechanics behind cryptocurrencies and the blockchain . But , within the retail market as a whole , there is still progress to be made .
On the institutional side , investors who have already made that decision to include digital assets within their portfolios are generally unflinching – perhaps , as Froehlich alludes to , it is because their crypto holdings represent a fairly low proportion of their overall investments and because they appreciate that , whatever happens with cryptocurrencies , traditional finance and decentralised finance are converging thanks to the adoption of distributed ledger technology .
“ In addition , through the process of experimenting with digital assets , those investors have been gaining an understanding and a comfort level with this asset class ,” Froehlich continues . “ Interestingly , theses vary with some investors hypothesising that bitcoin could be , for instance , the future digital gold , or Ethereum could be the next platform on which the majority of financial services are going to be built .”
Barriers to traditional adoption still persist Despite the robust confidence in digital assets that exist among
13 March 2023