When institutions larger than the cryptocurrency ecosystem begin to wake up to the potential of crypto, it’s certainly food for thought. Can the ever-evolving world of crypto remain outside of mainstream adoption for much longer?
Larry Fink, the CEO of BlackRock, the largest asset management firm in the world with around $9.4 trillion in AUM, doesn’t appear to pull any punches when it comes to speaking his mind. In 2017, Fink dismissed crypto as an “index of money laundering.” But just three years later the BlackRock CEO admitted that assets like Bitcoin had caught his attention.
“I do believe the role of crypto is it’s digitizing gold in many ways,” Fink said in a recent interview with Fox Business, while also referring to BTC as an “international asset.” Today, BlackRock is gearing up to launch one of the first Bitcoin ETFs, subject to SEC approval, in what promises to be a flagship moment for the cryptocurrency landscape.
The arrival of an exchange-traded fund from the world’s largest asset management firm is about far more than providing more exposure to crypto on Wall Street, it’s an exceptional form of institutional advocacy.
Data already shows that institutions are waking up to this latest shot in the arm for crypto acceptance. According to the PwC report, Rebuilding confidence in crypto, some 46% of surveyed hedge funds confirmed that they intended to deploy more capital into this asset class by the end of 2023, while 37% claimed that they’re waiting for further market maturity before investing.
Sustaining an Institutionally-Focused Ecosystem
One of the biggest risks facing institutions seeking to embrace crypto is that they’re entering a world where many participants champion decentralization, and consciously reject traditional financial processes for more decentralized financial services.
Because decentralization makes it more difficult to regulate the industry through single centralized bodies, some institutional investors may be put off by a perceived lack of security. However, other market commentators believe that the arrival of institutions will help to create an adaptable ecosystem that can suit all players.
“I think we’ll get two versions,” explains Clara Medalie, director of research at crypto market analysts, Kaiko. “I think we’ll still see a continuation of the more Decentralized Finance side which is completely trustless. But we’re also going to see a permissioned…
