The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
OPINION

As crypto crumbles, do institutional investors really want in?

In a desperate effort to catch the next boom in assets with no fundamental value, institutional investors are hunting for new ways into crypto – and asset managers seem only too happy to supply them.

bitcoin-g83345a86b_960.jpg

Have the record summer temperatures fried investors’ brains? On August 11, BlackRock, whose chief executive described bitcoin in 2017 as an index for money laundering, launched a private trust for US institutions to invest in it.

BlackRock cited substantial interest from institutional clients despite the recent steep falls. From a peak in November 2021 of $2.96 trillion, the market capitalization of all cryptos fell 72% to just $836 billion in June 2022, as rising rates brought down all markets. The Nasdaq fell 32% over the same period.

As investors somehow convinced themselves that the Fed has got on top of inflation (it hasn’t) and will soon start cutting rates (it won’t), cryptos rallied.

Price moves in crypto reflect a speculative bet on whether or not it will one day have a core place within the financial system

By mid-August, the overall market was down just 60% from its all-time high, while the Nasdaq was back to just 19% down. Bitcoin, which hit $68,000 in November and fell to $19,000 in July, recovered to $24,000 in mid-August.

This recovery came while almost every day a new hack emptied holders’ wallets on a bridge from one network to another, a crypto exchange stopped trading and froze customer withdrawals, and the crypto winter spread.

It

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree