Japanese Institutional Investors Show Growing Interest in Crypto, With 80% Planning to Invest Within Three Years

According to a survey conducted by Nomura and Laser Digital, Japan's institutional investors are increasingly embracing crypto, with nearly 80% planning to add it to their portfolios over the next three years, driven by a growing perception of crypto as a valuable tool for diversification. The primary reason cited for this shift is the low correlation between crypto and traditional asset classes, allowing for more effective portfolio management. However, allocations are expected to remain modest, with over half of respondents aiming to dedicate between 2% and 5% of their portfolios to crypto. The survey also indicates improving sentiment towards crypto, with 31% of respondents expressing a positive outlook, up from 25% in 2024, and negative sentiment declining to 18%. These findings coincide with Japan's ongoing efforts to refine its regulatory framework for digital assets, which has helped foster a thriving domestic crypto ecosystem. Major companies such as SBI Holdings and bitFlyer are leading the charge, and traditional financial institutions are also entering the market. Nomura's Laser Digital, established in 2022, is a prime example of this trend, focusing on trading, asset management, and venture investing. Furthermore, over 60% of respondents expressed interest in exploring income-generating strategies such as staking, lending, derivatives, and tokenized assets, demonstrating a shift towards treating crypto as a comprehensive financial tool rather than a speculative investment. Stablecoins are another area of interest, with 63% of respondents identifying potential use cases including treasury management, cross-border payments, and foreign exchange transactions, with a strong preference for stablecoins issued by major financial institutions. While challenges such as valuation frameworks, counterparty risks, and regulatory uncertainty persist, the survey suggests that institutional investors are now focused on navigating these obstacles rather than debating the merits of investing in crypto. The survey, which gathered responses from 518 investment professionals, was conducted in December and January, providing valuable insights into the evolving landscape of crypto investment in Japan.