PricewaterhouseCoopers (PwC), one of the world’s “Big Four” accounting and professional services firms, has predicted that institutional investors will be the main drivers of digital currency adoption in the next 12 months.
More Institutional Players Will Enter The Crypto Space In 2019
During an interview featured on Australia’s Bloomberg Television, Henri Arslanian, the “fintech and crypto leader” at PwC Asia, revealed that he thinks there’s a big year ahead for cryptocurrencies. Arslanian, a former director at UBS investment bank’s prime brokerage capital consulting services, remarked:
I think there is a lot of exciting things that the crypto ecosystem is looking forward [to] in 2019. One of them, I think, is really the entry of institutional players.
Reflecting on the business activity in the crypto space during this past year, Arslanian noted:
I think in 2018 we saw a lot of the big banks enter the space and in 2019 I expect many more to enter the space as well, in different ways. Some of them may decide to launch their own solutions, like Fidelity did here in the US by setting up a new company.
The Columbia University and London Business School graduate added: “Others may try to partner with some of the other crypto firms… And others may try to invest in crypto companies a bit like Goldman did with BitGo and Circle.” According to Arslanian, partnerships between blockchain and crypto-related companies and traditional institutions are “very good” because they “will bring the [appropriate and required] kind of level of institutional expertise” to the crypto space.
We Can Expect More “Regularity Clarity”
Similar to how many other crypto market analysts have observed, Arslanian told Bloomberg’s DayBreak program:
I think a lot of elements are changing at a global level, one of them is the regulatory clarity … If you look at 2018, a number of jurisdictions provided more regulatory clarity than we had before.
He also believes that other countries, which have not yet formulated comprehensive regulatory guidelines for cryptocurrencies such as France, “will be pushing ahead with some legislation on ICOs.” Arslanian further noted: “in the US, with all the news going on right now, [there are] some bipartisan initiatives [underway] to try to make the US more competitive when it comes to” regulating cryptoassets.
Crypto Is Much “Better Off” Without The “Hype”
Interestingly, Arslanian believes the crypto industry will be much better off without all the hype we saw in late 2017 when digital currency prices reached their all-time highs. He remarked:
In other industries there’s booms and busts, I think some of the positive news of the crypto fall was it actually cleared a lot of noise in the crypto sector.
Going on to draw comparisons between the Dotcom bubble and the emergence of cryptoassets, Arslanian said:
Like in the dot com boom, you’ll have some companies that’ll survive this boom and those may change their role in ways we can’t even imagine today, but in the short term there’s definitely a lot of crypto companies that are hurt.
Expressing views somewhat similar to those shared recently by Arthur Hayes, the CEO of BitMEX, the world’s largest crypto derivatives trading platform, Arslanian predicted that stablecoins and security tokens will play a key role in the crypto industry.
According to Arslanian:
Stablecoins [allow] crypto traders to stay in the crypto space but with an asset that is definitely less volatile. [Stablecoins] can [also] be used on a day-to-day basis [by] people who want to use crypto without the volatility that we’ve seen in recent months. … [Meanwhile], security tokens … are backed by real-life assets, for example, real estate. [These] … bring liquidity [to the crypto] space, [which is usually not there] for larger real estate projects. [Security tokens] also allow us to streamline a lot of the corporate action and dividends and that is actually very exciting.