Bloomberg: Institutional Interest in Cryptocurrency is Low
Cryptocurrency, Bitcoin (BTC), Wall Street–While excitement is beginning to bubble again over the possibility of a Bitcoin Exchange-Traded Fund, thereby providing the avenue for more large scale investing than what the current landscape affords, Bloomberg reports that the overall sentiment from institutional investors is disinterest.
Earlier in the day, EWN reported on comments by Gabor Gurbacs, Director of Digital Assets Strategy at VanEck, who claimed that approval of a Bitcoin ETF by the United States Securities and Exchange Commission would herald the entrance of a “billions” of dollars into the crypto marketplace. While Gurbacs position is no doubt colored by the proposition of his company likely becoming the first approved financial institution to offer a BTC ETF, his comments reflect the general sentiment of the cryptocurrency investing population: crypto is stagnating and waiting upon the injection of big player money to re-ignite both bullish sentiment and developer interest.
The 2018 calendar year has been decidedly bullish for the crypto markets, with most of the excitement in cryptocurrency and blockchain evaporating since the end of last year. While Wall Street has yet to obtain access to cryptocurrency investing through regulated and trustworthy channels, as opposed to the Wild West nature of the traditional crypto markets, the desire to pour billions into Bitcoin and altcoins may not be enough of a catalyst at present. Bloomberg reports that the greatest barrier to wide scale institutional investing entering the marketplace is not the influence of regulators, but the lack of interest on behalf of clients,
Large institutions currently have little appetite for investing in digital assets, said Nikolay Storonsky, a former Credit Suisse Group AG trader turned fintech entrepreneur. His London-based banking startup, Revolut Ltd., allows retail users to speculate on tokens including Bitcoin and Ether and is now valued at over $1 billion.
Earlier in the year BlackRock Inc.’s Chief Executive Officer Larry Fink, who controls trillions of dollars in customer assets, made a similar claim that investor interest in cryptocurrency is markedly low, including the controversial comment that,
“I don’t believe any client has sought out crypto exposure…I’ve not heard from one client who says, ‘I need to be in this.’”
Storonsky also singles out banks as being a problematic expectant for cryptocurrency investing if the interest fails to materialize from clients. While few hedge funds and institutional investing firms outside of those formed through cryptocurrency (such as Arrington XRP) have been active in the marketplace, banks are going to refrain from following suit in an interest to follow the money of their clients,
“Unless these big institutional investors and hedge funds move heavily into the crypto world I just don’t think banks will move because they simply try to make money from their clients. There is no interest from big institutional investors so far.’’
As evidence for the banking position, Bloomberg provides the example of Morgan Stanley, which is prepared to offer products related to Bitcoin futures if the desire among clients begins to emerge. Goldman Sachs and Citigroup are likewise positioned to develop investing products tied to Bitcoin and cryptocurrency, but have yet to do so because of the lagging interest by investors.