Majority of Japan's Institutional Investors Intend to Invest in Cryptocurrency Within the Next Three Years

A significant shift is underway in Japan, with institutional investors transitioning from cautious interest to proactive investment strategies in cryptocurrency, as revealed by a survey conducted by Nomura and Laser Digital. Almost 80% of the country's institutional investors expressed their intention to invest in cryptocurrency over the next three years, driven by the perceived benefits of diversification through low correlation with traditional asset classes. Although allocations are expected to be modest, with over half of respondents aiming for a 2-5% portfolio allocation, the trend reflects a growing optimism towards crypto, with 31% of respondents holding a positive outlook, up from 25% in 2024, and negative sentiment declining to 18%. Japan's regulatory framework, which has been refined over the years, including updates to the Financial Instruments and Exchange Act, has provided clarity and fostered the growth of a domestic crypto ecosystem, with major companies such as SBI Holdings and bitFlyer, as well as traditional financial institutions, playing a significant role. The survey, which gathered responses from 518 investment professionals, found that interest in cryptocurrency extends beyond simple price speculation, with over 60% of respondents expressing interest in income-generating strategies, derivatives, and tokenized assets, and 63% identifying potential use cases for stablecoins, particularly those issued by major financial institutions. While challenges such as valuation frameworks, counterparty risks, and regulatory uncertainty remain, the focus has shifted from whether to invest in cryptocurrency to how to do so effectively.