BlockFi co-founder Flori Marquez discussed institutional investment in cryptocurrencies in a recent interview. She stated that many businesses are offering crypto-focused financial products, and she went on to say,
“I believe the most pressing question right now is whether crypto-based financial products should be treated differently than other financial products.”
It essentially meant bridging the “worlds of traditional finance and crypto” in this context. She also stated that “state and national regulators’ engagement is a really positive move for the industry.” She also expressed her gratitude for the market’s evolution over the last four years, saying,
“I believe the landscape has shifted significantly.”
However, Marquez added, “Among the many voices who consider a lack of regulatory clarity a hurdle,
“A lot of people are sitting on the fence right now, waiting for regulatory clarity before getting involved…”
There is a subset of investors known as institutional investors. According to the co-founder of BlockFi, it is now easier to get funding for crypto businesses than it was a few years ago. She explained that, back in the day, there was a huge gap in raising seed funding because,
“Then there were the crypto VCs, who were mostly interested in blockchain and didn’t know much about financial products…”
She, on the other hand, believes that a large financial institution that does not have a crypto research desk today is likely lagging behind. In contrast, Anthony Scaramucci, the founder of SkyBridge Capital, recently stated that a large number of money managers continue to avoid cryptocurrency investments.
However, despite the asset’s volatility and risk, a recent research paper claims that it provides diversification benefits. Seven out of ten institutional investors want to invest in cryptocurrencies in the future, according to a Fidelity report. Regulatory concerns, however, are keeping some investors on the sidelines, as Marquez pointed out.
According to CoinShares’ weekly report, investors saw the recent China ban as a buying opportunity. According to the report, inflows totaled $95 million in the week ending September 27. The institutions’ total asset under management (AUM) stands at $52,646 million.
Grayscale has been leading the AUM race in recent months, according to the latest CryptoCompare Report. Companies like ARK Investment and Horizon Kinetics have expressed interest in Grayscale Bitcoin Trust (BTC).