Should institutions worry about the crypto-winter? State Street says…
According to banking behemoth State Street, global asset managers are unfazed by the ongoing cryptocurrency “winter.” In what has been nicknamed a “crypto-winter,” the prices of cryptocurrencies have fallen on the back of interest rate increases. In fact, Bitcoin has depreciated by more than 50% since January.
However, the sudden influx of new financial products tied to the cryptocurrency boom would suggest that established participants are counting on the asset class to endure.
Irfan Ahmad, the Asia-Pacific Digital Lead for the bank’s cryptocurrency arm State Street Digital, stressed that despite the market’s significant volatility in June and July. In an interview he said,
“During the June, July period where things were hotting up in terms of activity, we saw institutional clients not necessarily double down, but they weren’t deterred from placing strategic bets on the asset class itself.”
The Cboe Australia exchange listed three cryptocurrency exchange-traded funds (ETFs) from Cosmos Asset Management and 21Shares in May. Meanwhile, asset manager Monochrome has just received approval to introduce the nation’s first spot crypto-ETF with an Australian financial services license in August.
The majority of Australian financial institutions have avoided cryptocurrencies because they consider them to be too hazardous, except the Commonwealth Bank. It last year unveiled a crypto-investment pilot that has since encountered regulatory hurdles.
However, a few global juggernauts are investing in digital currencies. Last month, investment titan BlackRock unveiled a product that allows institutional clients exposure to Bitcoin, while Goldman Sachs introduced its first bitcoin-backed loan.
Ahmad referred to Goldman’s actions and predicted
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