On Friday (July 23), Perianne Boring, the Founder and President of the Chamber of Digital Commerce, talked about the institutionalization of Bitcoin during an interview with anchor Maria Bartiromo, anchor Fox Business show “Mornings with Maria“.
The Chamber of Digital Commerce is “the world’s leading trade association representing the digital asset and blockchain industry.” Its mission is “to promote the acceptance and use of digital assets and blockchain-based technologies.”
Bartiromo started the interview by asking about the “institutionalizing of crypto”, by which she was referring to Elon Musk’s comment on Wednesday (July 21) at the recent (virtual) B Word conference about Tesla “most likely” resuming the accepting Bitcoin as a means of payment and the report published yesterday (July 22) by Business Insider that said that JPMorgan has given its wealth management clients access to five cryptocurrency funds.
“Well, I’ve always had all the confidence in the world that digital assets, and Bitcoin specifically, will emerge as its own asset class, but not without controversy, and we’ve absolutely seen that in the markets with Elon Musk, these about-faces from the banks…
“So these two announcements, you know, JPMorgan’s specifically, what they’ve done is they’ve removed a couple of these closed-ended mutual funds from the restricted list. So now, the $630 billion dollars under JP Morgan’s wealth management division can have access to the securitized Bitcoin and Ethereum products.”
Bartiromo asked how digital assets will impact the economy.
“Bitcoin has really emerged as the leader of a store of value and in many ways it is replacing the role gold has played in diversifying portfolios for many years and in the last segment, we talked a little bit about inflation. Corporate institutional and retail investors are looking to invest in Bitcoin as a hedge against inflation, especially during uncertain economic times like this.”
Last month, Arcane Research, the research division of European crypto-focused investment firm Arcane Crypto, wrote about the institutionalization of Bitcoin in a report titled “The Bitcoin Trading Ecosystem and the Emerging Institutional Infrastructure”.
The report said:
“It has become a lot easier from both a regulatory and practical perspective for institutional investors to hold and invest in bitcoin. Many institutions have been reluctant to embrace the asset, but this is now changing.
“Institutional investors have three main ways to invest in bitcoin: Exposure through spot markets like LMAX Digital, exposure through derivatives like CME’s bitcoin futures, and exposure through investment vehicles like Grayscale’s Bitcoin Trust. All have become exceptionally popular over the past year…
“Part of bitcoin’s value lies in its ability to be self custodied. However, many institutions are unwilling to expose themselves to the risks associated with it. Instead, they seek custody solutions for digital assets as robust as those for traditional assets. Lately, we have seen the arrival of trusted custodians in the bitcoin market. Large financial institutions like BNY Mellon, Standard Chartered, and Northern Trust are getting ready to enter bitcoin custody, eliminating one of the biggest hurdles to invest for many traditional investors.
“Moreover, Fidelity has already built a bitcoin custody service for its institutional clients. These traditional firms are joining several crypto native custody providers, such as Coinbase, Gemini, and BitGo. The dominos are falling fast.
“With the domino effect at play, the trend of rising institutional demand is expected to continue. Some are beginning to dip their toes into the market. We have seen traditional financial players gain exposure to the market through their investment portfolios. Examples include Goldman Sachs investing in BitGo, Visa investing in Anchorage, Boston Consulting Group investing in Bakkt and BNY Mellon investing in Fireblocks.
“Bitcoin is becoming increasingly legitimized through the growing market and infrastructure, and continues to attract the attention of both retail and institutional investors as an emerging asset class.”
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.