How institutional investors are embracing cryptocurrency

By Jonathon Miller, Managing Director and Co-founder of Bit Trade

Cryptocurrency Institutional Investors
Jonathon D Miller CEO/Managing Director Bit Trade Australia Pty Ltd

In early October of this year (2018), financial services giant Fidelity announced its plan to enter the cryptocurrency space with a separate company called Fidelity Digital Asset Services.

The 72-year-old firm’s newest arm has since launched and now provides cryptocurrency custody and trade execution to institutional investors.

“Our goal is to make digitally native assets, such as Bitcoin, more accessible to investors. We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use,” said Fidelity’s Chairman and CEO Abigail Johnson in a press release.

Fidelity’s entrance into the crypto sphere is representative of a broader trend in the industry. Blockchain technology and digital currencies are increasingly being recognised as permanent and viable alternatives to traditional assets and investment structures. As a result, a significant number of institutional businesses are developing frameworks for their customers to interact with these digital assets.

According to an update to “Bitcoin Decrypted: A Brief Teach-In and Implications,” published by Morgan Stanley on October 31, 2018, Bitcoin is a “new institutional investment class,” and has been for almost 12 months. The volume of digital assets held under management has increased steadily since the beginning of 2016. At the time of publication, there is $7.11 billion of cryptocurrency stored by venture capital firms, private equity firms, and hedge funds.

Further, a recent report by Greenwich Associate found that 72 per cent of surveyed brokers, institutional asset managers, and hedge fund representatives think cryptocurrencies are “here to say.” And, 80 per cent believe regulations for cryptocurrencies will be introduced.

These optimistic figures are not unwarranted. In addition to Fidelity, some of the biggest names in finance are already exploring this innovative space. Goldman Sachs has pushed to become the first bitcoin trading operation at a Wall Street bank with a variety of contracts linked to the price of the currency.

Intercontinental Exchange, the parent company of the New York Stock Exchange, has reportedly been working on an online trading platform for high-value investors that would facilitate the trading and holding of Bitcoin.

JP Morgan, HSBC, Barclays, Credit Suisse, the Australian ‘Big 4’ (CBA, Westpac, NAB and ANZ) are among other leading financial institutions embracing blockchain and digital currency technology.

The recognition of digital assets as a legitimate asset class by institutions marks a new era in the evolution of this rapidly expanding industry. As new financial services businesses enter the space, improvements in regulation, infrastructure, investor protection, and transparency are on the horizon. Watch this space.

Cryptocurrency Institutional investors
Bit Trade is Australia’s longest running cryptocurrency exchange

Bit Trade: building tools for enterprise

We are Australia’s longest running cryptocurrency exchange, and our mission is simple: to give everyone safe, and intelligent access to the world of cryptocurrency. With a streamlined trading portal for individuals and organisations and an OTC trading desk for higher-volume clients, we securely connect all types of investors to the assets they want.

What’s more, our forthcoming trading gateway API and sophisticated reporting tools will equip institutional traders with the knowledge they need while giving enterprises with specific requirements for fully customised integrations to an array of global digital currency markets.

Bit Trade’s innovation and consulting team Bit Trade Labs helps enterprise overcome the barriers to entry by providing advisory, blockchain product design and engineering services to enterprise and institutions seeking to take advantage of blockchain technology.

This article was contributed by Bit Trade. To help Bit Trade execute its planned innovations, it is engaging in an Equity Crowdfunding campaign via Equitise. To learn more about the offer, click here. 

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