At least $27 trillion of assets managed by major U.S. financial institutions are actively seeking to provide clients with exposure to Bitcoin and crypto. CoinShares Chief Strategy Officer, Meltem Demirors, recently highlighted at least eight major financial institutions that have signaled moves in the digital assets space, including BlackRock’s spot Bitcoin ETF filing and Fidelity’s crypto wealth management solutions. Other prominent names include JP Morgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco, and Bank of America.
There is a whopping $27 trillion in assets under management between these institutions. However, it’s essential to note that only a tiny portion of this amount would likely be allocated to crypto investments. Earlier this month, BlackRock’s June 16 spot Bitcoin exchange-traded fund application led to a wave of filings for similar products, boosting the narrative that “institutions are coming” for Bitcoin.
BTC’s price reached a 2023-high of $31,185 on June 24 amid surging confidence. While “the institutions are coming,” Demirors noted that it’s still more of a trickle than a wave. “We’re seeing the bridges being built in real-time,” she added. The potential influx of institutional investments has sparked excitement amongst blockchain enthusiasts, but skepticism lurks in the background, with some suggesting that this institutional interest may not translate into substantial investments.
Reflexivity Research co-founder, Will Clemente, echoed Demirors’ sentiment, pointing out that Bitcoin’s market capitalization is less than $600 billion. Institutional investors are already showing more interest in Bitcoin-related funds. The ProShares Bitcoin Strategy ETF (BITO) saw its largest weekly inflow for a year, pushing AUM over $1 billion.
However, challenges persist. Earlier this week, Federal Reserve Board of Governors member Michelle Bowman criticized the absence of a crypto regulatory framework, claiming that the uncertainty over the asset class traps institutions in a “supervisory void.”
As more institutions signal their interest in digital assets, the level of skepticism regarding their potential impact on the crypto market remains. While this surge in institutional interest is indeed a positive development for cryptocurrencies and their adoption, only time will tell if these large players will significantly impact the market and the technology. It is essential for enthusiasts and investors in the space to carefully weigh the potentials and risks that this institutional interest brings.
Source: Cointelegraph
