Japan's Institutional Investors Show Growing Interest in Crypto Investments

In Japan, the perception of crypto investment is transitioning from cautious curiosity to active planning, as revealed by a survey conducted by Nomura and its digital asset division, Laser Digital. Almost 80% of the country's institutional investors plan to incorporate crypto into their portfolios over the next three years, driven by the view that crypto serves as a tool for diversification. The primary reason cited for this inclusion is the low correlation of crypto with traditional asset classes, although allocations are expected to be modest, with over half of respondents aiming for a 2% to 5% portfolio allocation. Furthermore, sentiment towards crypto is improving, with 31% of respondents expressing a positive outlook, up from 25% in 2024, and negative sentiment decreasing 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 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 are also entering the industry, with firms like Nomura expanding into crypto through subsidiaries like Laser Digital. The interest in crypto is expanding beyond mere price speculation, with over 60% of respondents expressing interest in strategies like staking, lending, derivatives, and tokenized assets, indicating a broader view of crypto as a financial tool. Stablecoins are another area of interest, with 63% of respondents identifying potential use cases such as treasury management and cross-border payments. However, challenges persist, including the lack of established valuation frameworks, counterparty risks, and regulatory uncertainty, although these concerns are shifting from whether to invest in crypto to how to do so effectively.