Majority of Japan's Institutional Investors Set to Enter Crypto Market Within Three Years

In Japan, the perception of cryptocurrency investment is transitioning from cautious observation to proactive portfolio management, as indicated by a survey conducted by Nomura and Laser Digital. Almost 80% of the country's institutional investors are planning to incorporate crypto into their portfolios over the next three years, driven by the growing recognition of crypto as a means of diversification. The primary reason cited for this move is the low correlation between crypto and traditional asset classes, allowing for greater portfolio diversification. However, allocations are expected to remain modest, with over half of the respondents aiming to allocate between 2% and 5% of their portfolios to crypto. Furthermore, the survey reveals an improvement in sentiment towards crypto, with 31% of respondents expressing a positive outlook, up from 25% in 2024, and a decline in negative sentiment 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 regulations, following the Mt. Gox collapse in 2014, has helped foster a domestic crypto ecosystem supported by major companies such as SBI Holdings and bitFlyer, as well as traditional financial institutions. The survey, which gathered responses from 518 investment professionals, including institutional investors, family offices, and public-interest organizations, was conducted in December and January. It highlights a significant shift in the approach to crypto investment, with institutions now focusing on how to invest in the market rather than debating whether to do so. Over 60% of respondents expressed interest in income-generating strategies, such as staking and lending, and in derivatives and tokenized assets, indicating that investors are beginning to view crypto as a comprehensive financial tool rather than a speculative trade. Stablecoins are also gaining attention, with 63% of respondents identifying potential use cases, including treasury management and cross-border payments, and expressing higher trust in stablecoins issued by major financial institutions. Despite the remaining challenges, such as the lack of established valuation frameworks and regulatory uncertainty, the survey suggests that institutional investors in Japan are becoming increasingly receptive to the idea of crypto investment.