Recent insights from a survey conducted by Nomura Holdings and Laser Digital Holdings illuminate changing perspectives among Japanese institutional investors regarding cryptocurrency.

The survey, which garnered responses from 547 investment managers across sectors like family offices and public interest corporations, indicates a significant embrace of cryptocurrency within these fields.

Key findings reveal that 54% of respondents plan to enter the cryptocurrency market within the next three years. This reflects a shift towards diversifying investment portfolios with digital assets, viewing them as both speculative tools and integral components of diversified investment strategies.

While only 16% consider digital currencies potential substitutes for traditional base currencies, a substantial 62% view them as high-return investment opportunities. This perspective underscores a strategic approach to harnessing digital assets' unique attributes, including their low correlation with other asset classes and potential as a hedge against inflation.

Moreover, most investors intending to incorporate digital currencies plan to allocate between 2% and 5% of their assets under management, with a minimum investment horizon of one year. This cautious yet optimistic approach indicates growing confidence in the longevity of digital assets as an investment class.

Beyond direct investments, there is notable interest in ancillary crypto activities such as staking, mining, and lending, activities explored by over half of the surveyed investors.

However, the journey into crypto investment is not without challenges. Key obstacles identified include the lack of established fundamental analysis methods, high volatility, and concerns about counterparty risks.

From a regulatory perspective, Japan appears more accommodating compared to neighboring countries like China. Recent policy adjustments have allowed venture capital firms and investment funds to hold cryptocurrencies directly, signaling proactive support for the digital currency sector under Prime Minister Kishida’s administration. This regulatory stance, coupled with potential developments in crypto ETFs, could further stimulate market participation among Japanese investors.

Already, these regulatory shifts are influencing market dynamics, as evidenced by Tokyo-listed company Metaplanet Inc.’s strategic adoption of Bitcoin as a treasury asset, underscoring growing corporate interest in digital assets as a long-term investment strategy.