Institutional Adoption of Crypto: Canada’s Lead and Impact on Investment Strategies

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The recent shift in perspective toward major cryptocurrencies, such as Bitcoin (BTC), from institutional investors and portfolio managers has created ripple effects on the adoption of digital assets. Fred Pye, CEO of 3iQ, Canada’s first Bitcoin fund issuer, commented on Canada’s advanced regulation for crypto trading and its potential to attract a wider range of investors to the digital asset market in an interview with Cointelegraph during Bitcoin 2023 conference.

According to Pye, institutional investors and fund managers are exploring alternative investment strategies, as concerns over global inflation and macroeconomic challenges rise. This has led them to recognize cryptocurrencies, especially Bitcoin, as a “serious venue” for investment. Pye also believes that as the FOMO surrounding Bitcoin has diminished, the focus has shifted toward artificial intelligence (AI) and other emerging technology sectors, inviting responsible portfolio managers to consider investing in cryptocurrencies.

Looking ahead, Pye suggests that the future theme for crypto investments will center on practical use cases. As the technology continues to advance, Pye encourages investors to put it to work, both in terms of maximizing profits and in improving various aspects of society.

One of the most critical factors driving institutional adoption in Canada has been the country’s progressive approach toward launching crypto exchange-traded funds (ETFs). Canadian regulators have been at the forefront of approving crypto ETFs in North America, even as the U.S. Securities and Exchange Commission remains largely hesitant. With several Bitcoin and Ether (ETH) products from 3iQ, Purpose Investments, and Evolve Funds Group, millions of dollars have been drawn to the crypto space in Canada.

The operational structure of regulated digital asset ETFs in Canada has gained attention for its efficiency and accuracy in tracking asset prices. According to Pye, there is “no difference between running a Bitcoin ETF and running a gold ETF,” with low fees and assurance that any Bitcoin they purchase is “clean.” This level of transparency addresses many investor concerns and fosters continued interest in Canadian crypto investments.

Canada’s most recent initiative toward digital assets is a public consultation concerning a central bank digital currency (CBDC). The country’s citizens are being consulted on their desired features for a potential digital Canadian dollar, with the results expected to be published later this year. As regulations evolve and more use cases for cryptocurrency come into focus, new investors may be drawn to the market, paving the way for the future of digital assets.

Source: Cointelegraph

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