Majority of Japan's Institutional Investors Set to Invest in Cryptocurrency Within Three Years

A recent survey conducted by Nomura and its digital asset arm, Laser Digital, indicates a substantial change in the way Japan's institutional investors view cryptocurrency, with nearly 80% planning to incorporate crypto into their portfolios over the next three years. This shift is largely driven by the perception of crypto as a means of diversifying investments, with many respondents citing its low correlation with traditional asset classes as a primary reason for adding exposure to their portfolios. While allocations are expected to be modest, with over half of respondents aiming to dedicate between 2% and 5% of their portfolios to crypto, the overall sentiment towards cryptocurrency is improving, 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 been in place since the aftermath of the Mt. Gox collapse in 2014. The country's established framework has fostered a thriving domestic crypto ecosystem, with major companies such as SBI Holdings and bitFlyer playing key roles, and traditional financial institutions also entering the market. The survey, which gathered responses from 518 investment professionals, including institutional investors, family offices, and public-interest organizations, suggests that interest in cryptocurrency is expanding beyond simple price speculation, with over 60% of respondents expressing interest in income-generating strategies such as staking, lending, derivatives, and tokenized assets. Additionally, 63% of respondents identified potential use cases for stablecoins, including treasury management, cross-border payments, and foreign exchange transactions, with trust being highest for stablecoins issued by major financial institutions. Despite the remaining challenges, including the lack of established valuation frameworks, counterparty risks, and regulatory uncertainty, the survey indicates that institutional investors are now focused on how to invest in cryptocurrency, rather than debating whether to do so.