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

In Japan, the approach to crypto investment is transitioning from cautious interest to active planning, as revealed by a Nomura survey, with nearly 80% of institutional investors planning to invest in crypto over the next three years. This shift is driven by the growing perception of crypto as a tool for diversification, with many respondents citing its low correlation with traditional assets as a key reason for investment. However, allocations are expected to be limited, with over half of respondents aiming to invest between 2% and 5% of their portfolios. The survey also indicates improving sentiment towards crypto, with 31% of respondents viewing it positively, up from 25% in 2024, and negative sentiment declining to 18%. These findings come as Japan continues to refine its regulatory framework for digital assets, providing clarity that has fostered a domestic crypto ecosystem. Major companies such as SBI Holdings and bitFlyer are anchoring this ecosystem, and traditional financial institutions are also entering the industry. The survey suggests that interest in crypto is expanding beyond simple price exposure, with over 60% of respondents expressing interest in income-generating strategies and derivatives. Stablecoins are also a focus area, with 63% of respondents identifying potential use cases such as treasury management and cross-border payments. While challenges such as valuation frameworks and regulatory uncertainty remain, investors are now focused on how to invest in crypto rather than whether to do so.