Two executives at Wave Financial, an asset management firm that offers tailored strategies to high-net-worth individuals and entities, have reported seeing increased institutional demand for crypto products amid the bear market.
Speaking to Cointelegraph at the Blockchain Futurist Conference in Toronto on Wednesday, Wave Financial’s head of business development, Mike Jones, said institutional investment in crypto could be driven by the high end of wealth management firms including Morgan Stanley, Merrill Lynch and Goldman Sachs looking for ways to let clients their few exposure to the space. Jones cited the example of BlackRock partnering with Coinbase on Aug. 4, a move that will give users of the asset manager’s institutional investment management platform Aladdin access to crypto trading, custody, prime brokerage and reporting capabilities.
In addition to wealth managers, the Wave chief said venture capital could see “a lot of growth” in part due to demand for innovative investment vehicles. Wave Financial’s investment and venture principal Gerard Berile added that VCs giving clients exposure to crypto without going through centralized exchanges and still trading in large-scale volume has been a “net positive for the industry as a whole.”
“On the venture side of the house, the bear market has been somewhat positive,” Berile said. “Over the last year and a half, we’ve seen valuations of many different companies get incredibly high – a bit frothy, you might say. Over the last six months or so, we’ve seen company valuations come down to slightly more realistic valuations, and it’s become a great time to start allocating capital.”
“What’s encouraging from a market perspective in general is that you think about the last cycle — a few years ago, a lot of the talk that was around the ecosystem then was, ‘Is this the end of crypto? Is crypto dead?'” Jones said. “From an institutional adoption standpoint and an institutional demand standpoint, the question now seems to be much more around ‘Is this the right time to get in?'”
“Things are much more encouraging, although this is clearly a time of pain. It also comes with opportunities, especially for people building in the space.”
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Data from the blockchain appears to support some of Beriles and Jones’ claims. Crypto intelligence firm IntoTheBlock reported in March that the number of large transactions on the Cardano blockchain increased more than 50 times in 2020, indicating “increasing institutional demand.” funds with direct exposure to Bitcoin (BTC) — many have said that such a listing could attract new investors to the market.