Japanese Institutional Investors Show Growing Interest in Crypto Investments

A significant shift is underway in Japan's investment landscape, with institutional investors transitioning from a cautious approach to actively planning their crypto investments, as revealed by a survey conducted by Nomura and its digital asset subsidiary, Laser Digital. Approximately 80% of the country's institutional investors intend to incorporate crypto into their portfolios over the next three years, driven by a growing perception of digital assets as a valuable tool for diversification. The primary reason cited for this move is the low correlation between crypto and traditional asset classes, allowing for more robust portfolio management. While allocations are expected to be modest, with over half of respondents aiming to dedicate between 2% and 5% of their portfolios to crypto, the trend indicates a notable change in sentiment. Positive outlooks on crypto have increased, with 31% of respondents viewing it favorably, up from 25% in 2024, while negative sentiments have decreased to 18%. These findings emerge as Japan continues to refine its regulatory framework for digital assets, one of the most established among major economies. The country's early adoption of crypto regulations, following the Mt. Gox collapse in 2014, has contributed to a clearer environment for digital assets, including updates to the Financial Instruments and Exchange Act. This regulatory clarity has fostered a thriving domestic crypto ecosystem, with major players such as SBI Holdings and bitFlyer, as well as traditional financial institutions, entering the market. Nomura's establishment of Laser Digital in 2022 marks another significant step, as the company expands into trading, asset management, and venture investing in the digital asset space. Furthermore, interest in crypto extends beyond mere price speculation, with over 60% of respondents expressing interest in strategies like staking, lending, derivatives, and tokenized assets, indicating a broader acceptance of crypto as a financial tool. Stablecoins are also gaining attention, with 63% of respondents identifying potential use cases in treasury management, cross-border payments, and foreign exchange transactions, particularly when issued by major financial institutions. Despite remaining challenges, including valuation frameworks, counterparty risks, and regulatory uncertainty, the focus has shifted from whether to invest in crypto to how to do so effectively. The survey, conducted from December to January, gathered insights from 518 investment professionals, providing a comprehensive view of the evolving landscape of crypto investment in Japan.