Institutional investors entering the crypto market is developing slowly. This year, experts suggest that regulatory clarity could potentially bring institutional investors at play. From the US Securities and Exchange Commission potentially approving the Solid X and VanEck Bitcoin ETF proposal to Fidelity making their own company to cater to institutional investors looking to enter the crypto market, these are things that keep the crypto market hopeful.
For CNBC host and CEO of BKCM Brian Kelly, he talked about the future of the industry via CNBC’s “Power Lunch” segment. He brought up the topic about Fidelity Digital Asset Services, which is the new company that was brought about by Fidelity specifically for institutional investors. He regarded it as “fantastic news”.
According to Kelly, legitimate crypto custody is the most important aspect of FDAS since it can attract institutions, endowments, family offices, and hedge funds into participating in the crypto market.
Even universities are now looking to invest in cryptocurrencies. You have Yale University, which has the second largest higher education endowment, that invested in Paradigm which is a crypto fund. In addition to this, Harvard, Stanford, and MIT already allocated in different crypto related investment opportunities.
Mike Novogratz of Galaxy Digital became the very first client for Fidelity. He echoes the sentiments of Brian Kelly saying that there is a possibility of having “institutional FOMO”. This could be the catalyst for another round of crypto bull run.
For Novogratz though, he believes that Bitcoin isn’t going near $10,000 this year. Novogratz has ever since mellowed in his prediction when it comes to the crypto industry. In fact, he even said that Bitcoin price has already bottomed.
Brian Kelly mentioned that “I can tell you from the conversations that we’ve had, for our crypto hedge fund, that the institutional herd is starting to enter this market” Could this insider knowledge of the industry something that should be taken seriously?
So when exactly are Wall Street giants going to enter the market? On the most part, Novogratz believes that 2019 is going to be the time when institutional investors are going to enter the picture. He believes that around the first or second quarter of 2019 is when we are going to finally see institutional players get involved.
As for Kelly, when asked when are institutional investors going to enter, he simply said “Soon. I think very soon”. He also added that “I wouldn’t surprise me to see a lot of those companies have something working in their background by Q1 of 2019. I mean if you are looking at this, there are a couple of things you need to think of. Fidelity is in this space. Also, remember that startups like Robinhood launched a crypto app and got a million users in four days”.
For the most part, this is still a guessing game. In fact, regulations still aren’t luring the institutional investors to become fully involved in crypto. And also, you have prominent economists such as Nouriel Roubini, criticize the crypto market calling it the “mother or father of all scams”. He is the same NYU economist who predicted the 2008 economic crisis. And also, you have IMF warning regarding the niche.