Japanese Institutional Investors Show Growing Interest in Crypto Investments

A significant shift is underway in Japan's institutional investment landscape, with attitudes toward cryptocurrency evolving from cautious observation to proactive planning. According to 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 the perception of crypto as a 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 diversification. Although 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 signifies a notable change in sentiment. Positive outlooks on crypto have increased, with 31% of respondents expressing a favorable view, 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 exchange regulations following the 2014 Mt. Gox collapse has paved the way for a clear and integrated approach to digital assets within its financial laws. This regulatory clarity has fostered a thriving domestic crypto ecosystem, with major players such as SBI Holdings and bitFlyer, alongside traditional financial institutions, actively participating in the industry. Nomura's establishment of Laser Digital in 2022 to engage in trading, asset management, and venture investing further underscores the growing interest in crypto. Moreover, over 60% of survey respondents expressed interest in strategies beyond simple price speculation, including income-generating activities like staking and lending, as well as derivatives and tokenized assets. This indicates a broader recognition of crypto's potential as a financial tool rather than merely a speculative investment. Stablecoins have also garnered significant 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 the remaining challenges, including valuation frameworks, counterparty risks, and regulatory uncertainties, the focus has shifted from whether to invest in crypto to how to navigate the investment effectively. The survey, conducted from December to January, compiled responses from 518 investment professionals, offering a comprehensive insight into the evolving landscape of institutional investment in crypto.