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Crypto: 80% of institutional investors expect digital assets to replace traditional investments

Yahoo Finance’s Alexandra Semenova joins the Live show to discuss crypto investment trends and how investors increasingly see digital assets replacing traditional assets.

Video Transcript

AKIKO FUJITA: Well, a new report out today points to the growing popularity of cryptocurrency, so much so that many investors believe it may replace traditional avenues of investing. Let's bring in Yahoo Finance's Alexandra Semenova, who's here with me at the desk. So what does the data say?

ALEXANDRA SEMENOVA: Well, Akiko, yet another survey out underscoring the institutional momentum of crypto. About 80% of institutional investors reporting that they believe crypto will replace traditional asset classes in the next decade. A really big deal here when you think about the responses that would come of this about a year ago.

Sentiment is really changing around crypto among smart money, but even more significant here is that 70% of institutional investors said that they believed crypto is a trustworthy investment, and 68% are recommending crypto as part of an investment strategy. So, pretty stunning how it's come to the center of mainstream investing in such a short period of time. When you think back just a few months ago, the responses would have been much, much different.

AKIKO FUJITA: Yeah, and it feels like we get so many of these surveys that point to this growth in this space. But what are some of the big name investors that are either getting into the space now or increasing their exposure to crypto?

ALEXANDRA SEMENOVA: Yeah, well, beyond these surveys, we're seeing anecdotal evidence of this too very much. Just the other day, we had news that Fidelity was now allowing clients to invest in crypto as part of their 401(k) plans, which is a huge deal.

In September, we had-- in September of 2021, we had the Fairfax County Retirement System say that they're going to make an allocation to crypto, and everyone kind of gawked at that, thinking that it was such a huge deal to be investing retirement assets into such a skeptical asset-- into such a risky asset class. But now this is becoming more widespread. You had BlackRock recently in its earnings call saying that they're learning about crypto, and they're going to do more as client demand there increases.

AKIKO FUJITA: Yeah, I mean, the pension funds have always been sort of that next leg up. And you're saying some of these retirement funds are already getting into it. What are you hearing from some of these investors? I mean, is this just pressure from clients who are saying, we want more exposure to crypto? Is it about using this as a hedge? What's the strategy?

ALEXANDRA SEMENOVA: It's definitely a combination of both. There's definitely more client demand, as you see the opportunities that are emerging in crypto. But at the same time, on the investor side, they have clients that they know that they're going to miss out on opportunities if they don't go in on crypto. And there's so much room to capitalize on it. And it's kind of an element of FOMO there as well.

AKIKO FUJITA: Yeah, even if it's just a little exposure, at least some exposure there in a growing market. All right, Alexandra Semenova, thanks so much for that.

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