Regulation
A “tidal wave” of institutional money is coming for crypto
Analysts at HC Wainwright & Co. strongly believe that large institutional investors are just beginning to invest in crypto ETFs, necessitating regulatory clarity in the sector.
Citing the recent Coinbase State of Crypto Summit, analysts expressed positive sentiment towards the crypto industry as a whole. They firmly believe that positive momentum is developing in the crypto ecosystem and more money is coming.
The summit, which took place in New York, highlighted the growing institutional interest in crypto, sparking bullish sentiment on Bitcoin and digital assets. Key event topics included the successful launch of the Bitcoin spot (BTC) ETFs, the evolution of payments and stablecoins, tokenization of real-world assets, and the need for better crypto regulation in the United States
Institutions are just starting to invest
Following the passage of spot BTC ETFs, there was a important rally for BTC and other digital assets, attracting new investors.
Spot BTC ETFs have accumulated over $15 billion in total net inflows and manage approximately $63.5 billion in assets, making them the fastest growing ETF class in history. Coinbase serves as a custodian for approximately 90% of these assets.
However, around 80% of these flows come from retail investors, and major brokerage and investment advisory platforms continue to conduct “due diligence”. influx as these products gain wider approval.
“Expect a tidal wave of institutional inflows when major wealth management platforms approve BTC ETFs,” the analysts noted.
Additionally, more than $70 trillion in wealth is expected to be transferred to younger investors – millennials and Generation Z – who are much more inclined to invest in crypto than the older generation.
Tokenized assets
Traditional financial systems are slow to change, but the broader crypto industry is evolving to the point of real-world utilitygoing beyond a simple asset class and store of value.
“Stablecoins have settled a total volume of $10 trillion in 2023, surpassing the total transaction volume of the world’s second largest payment network, Mastercard, while Coinbase found in a recent survey that 56% of Fortune 500 are actively working on blockchain projects. » we read in the report.
BlackRock, the world’s largest asset manager, has tokenized real-world assets on the Ethereum blockchain. The BlackRock USD Institutional Digital Liquidity Fund has $382 million in assets under management.
Other analysts believe the global exchange traded fund (ETFs) the market could reach $35 trillion in the next decade, which will include crypto investments.
Regulatory clarity
Proper regulation could benefit the crypto industry and encourage institutional investors to get involved. The recent bipartisan support for the Financial Innovation and Technology for the 21st Century (FIT21) Act in the House of Representatives suggests a more crypto-friendly regulatory environment.
Citing all these reasons, HC Wainwright analysts hope that clear and thoughtful regulation in the United States will have a positive impact on cryptocurrency prices and trading volumes by attracting institutional investors who are “waiting on the sidelines” due to lack of clarity.
They reiterated their “Buy” rating of Coinbase Global, Inc. (PIECE OF MONEY) with a price target of $315 per share. COIN is currently trading at $238.18