Investors across Asia Pacific (Apac) continue to show confidence in digital assets, with nearly a quarter of investors planning to increase their allocation to cryptocurrencies and other digital assets during the next 12 months, according to the Fidelity International’s Be Invested Global Study.
Apac investors are significantly more likely to increase (23%) than decrease (3%) their exposure to digital assets; younger investors are especially optimistic, with 34% of those aged 18-34 planning to increase their exposure, while only 4% expect to reduce it.
The survey also suggests that investors are increasingly looking beyond short-term price movements. Among Apac investors who currently invest in, or are open to investing in cryptocurrencies, 44% cite strong long-term growth potential as the primary reason for considering digital assets. This compares with 36% who view it primarily as an opportunity for short-term gains. Another 27% believe in digital asset’s uncorrelated returns to the rest of the investment market.
Giselle Lai, director, digital assets strategist Apac, Fidelity International, said: “As the digital asset market continues to mature, investors are increasingly viewing Bitcoin not simply as a speculative asset, but as a potential long-term allocation within a diversified portfolio.
“Our research shows that long-term growth potential is the primary reason Apac investors are considering digital assets, suggesting a shift away from short-term trading narratives. APAC investors are expecting 8.6% annualised return for long term investment over five years. In fact, Bitcoin’s average annual return over the past five years is 10.92%.
Growing acceptance of digital assets is also reflected in investors’ attitudes. Over 40% of respondents believe they have a good understanding of digital assets. Four in ten Apac investors think digital assets represent the future of payments and finance, while more than half (55%) say they would feel more comfortable investing if the asset class became more regulated.
The fear of missing out is most pronounced among younger investors, 42% investors aged 18-34 agree that demand for digital assets is high and they do not want to miss out, compared with 35% of investors aged 35-54 and 22% of those aged 55 or above.
At the same time, investors remain realistic about the risks, with 66% think that cryptocurrencies are a high-risk, high-reward investment. Female investors are more likely than male investors to view digital assets as too risky. Nearly two-thirds of female investors (64%) believe digital assets are too risky for them, compared with 58% of male investors.
“Investors should view digital assets through the same lens as any other investment allocation, focusing on long-term objectives, diversification benefits and appropriate position,” said Lai.
“For investors with the right risk tolerance, a modest allocation to Bitcoin can enhance portfolio diversification without changing the overall discipline of long-term investing.”