Japan's Institutional Investors Show Growing Interest in Crypto Investments

In Japan, the perception of crypto investments is transitioning from cautious exploration to active planning, as revealed by a survey conducted by Nomura and its digital asset subsidiary, Laser Digital. Approximately 80% of the country's institutional investors plan to incorporate crypto into their portfolios over the next three years, driven by the view of crypto as a tool for diversification. Most respondents cited the low correlation of crypto with traditional assets as a primary reason for investing. However, allocations are expected to be modest, with over half of respondents aiming to dedicate between 2% and 5% of their portfolios to crypto. The survey also notes an improvement in sentiment, with 31% of respondents expressing a positive outlook on crypto, up from 25% in 2024, and negative sentiment declining to 18%. These findings coincide with Japan's refinement of its regulatory framework for digital assets, which has been in place since the Mt. Gox collapse in 2014. The country's regulatory clarity has contributed to the growth of a domestic crypto ecosystem, with major companies such as SBI Holdings and bitFlyer playing key roles. Traditional financial institutions have also begun to enter the industry, with Nomura establishing Laser Digital in 2022 to engage in trading, asset management, and venture investing. Furthermore, over 60% of respondents expressed interest in income-generating strategies, such as staking and lending, as well as derivatives and tokenized assets, indicating a shift towards treating crypto as a broader financial tool. Stablecoins are also gaining attention, with 63% of respondents identifying potential use cases, including treasury management and cross-border payments. While challenges such as valuation frameworks, counterparty risks, and regulatory uncertainty remain, investors are now focused on how to invest in crypto rather than whether to do so.