This year has been tough for everyone. Whether you’re an investor or not, the economic
hardships stemming from COVID-19 have been felt – supply chain issues, inflation rates, and
now interest hikes. On top of that, for crypto investors, there was Voyager and Celsius
declaring bankruptcy, which froze millions in customer assets, and the Luna fiasco which shook
the entire crypto world. All of this contributing to the current market crash that’s being hailed
as ‘Crypto Winter’.
So, who in their right mind would be bullish on this current market and economy?
Over the last year, retail investors have put the brakes on their investment budgets, yet
institutional investors are moving forward against the current tide. What are these institutions
doing and why should we take notice and rethink our investing strategies?
To start let’s look at Blackrock, the world’s largest asset management company. They recently
announced a partnership with Coinbase to provide their institutional investors access to crypto
directly on the investment management platform “Alladin”.
“Despite the steep downturn in the digital asset market, we are still seeing substantial interest
from some institutional clients in how to efficiently and cost-effectively access these assets
using our technology and product capabilities,” the company said in a statement.https://www.barrons.com/articles/blackrock-bitcoin-ark-51660235072
Relevant article:
Blackrock isn’t the only institution bullish on crypto. Other investment giants are also getting
in on the action. Schwab asset management now provides an ETF, Schwab Crypto Thematic
(STCE). Their objective,
“The fund’s goal is to track as closely as possible, before fees and expenses, the total
return of an index that is designed to deliver global exposure to companies that may benefit
from the development or utilization of cryptocurrencies (including bitcoin) and other digital
assets, and the business activities connected to blockchain and other distributed ledger
technology.”
https://www.schwabassetmanagement.com/products/stce
This fund does not target actual coins/tokens or cryptocurrencies, but companies that are
invested in crypto like MicroStrategy, Coinbase, Riot Blockchain, Robinhood and interactive
brokers.
Next, we have Goldman Sachs, which has allowed customers to get cash loans using bitcoin
as collateral. They used “Galaxy Digital”, to conduct the first-ever OTC trade by a large wall
street bank, proving that these major companies and banks are investing and believe that
crypto and blockchain technology will be an integral part of the financial service sector. Also,
they claim that:
Bitcoin currently has a 20% share of the “store of value” market, according to Goldman
Sachs analyst Zach Pandl. This means the asset, Bitcoin, can maintain its worth over time
without depreciating, in comparison to precious metals or some currencies. He wrote that
within a few years if its share of the store of value market were to “hypothetically” reach 50%
the cryptocurrency could reach this six-figure milestone.https://www.forbes.com/sites/korihale/2022/04/01/goldman-sachs-co-signs-bitcoin–
ethereum-for-high-net-worth-clients/?sh=543315237f9b
Franklin Templeton is another financial giant diving into the digital asset market by offering
their institutional investors separately managed accounts (SMA).
“Customized SMAs are a perfect delivery mechanism for these assets constructed by sound
advice,” Bayston said in an email. “SMAs are a significant business in traditional finance, and
we are bringing these digital assets into a high-quality product offering delivered via RIAs.
This is a further extension of what we do.”
Retail investors would be wise to take notice of what these institutions are doing, or they may
very well get left behind. Thinking back just a few years, these same companies did not believe
in crypto and thought of it as a joke. So, it’s hard to imagine that these giants would blindly
start investing in the market. It’s safe to assume that they have done their due diligence and
taken the time to research and analyze the market and be confident enough to start pouring
their money into it and giving access to their clients. And with this wealth coming in from
institutional investors, it will stabilize the crypto market in the years to come.
Although times are uneasy, and a little scary, it is times like these where fortunes can be made.
I believe we are still early, and can have financial security in this market, even with everything
that is going on. The crypto market is going to be a part of our future, and the institutions are
the ones who are now cementing that into the economy.
This article is for general information purposes and is not intended to be and should
not be taken as legal or investment advice. The views, thoughts, and opinions
expressed here are the author’s alone and do not necessarily reflect or represent the
views and opinions of Vancouver Bitcoin
