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It may seem like the cryptocurrency has lost its luster for institutional investors, but their interest remains and may be maturing, according to Elliott Hahn of Cantor Fitzgerald.
Han, who leads investment banking in cryptocurrency, blockchain and the company’s digital assets, told CNBC’s “Crypto World” that those who remain in cryptocurrency are exploring different use cases for it.
“There’s a lot of excitement in this space right now,” he said, speaking at Digital Asset Week, a conference in San Francisco geared to some of America’s largest financial institutions. “There are a lot of companies here that you look at from different points of view and angles. That’s what we’re trying to learn and understand more, what are the other use cases that aren’t necessarily obvious.”
It seems like an initial step, but it’s a huge shift in thinking since people have piled into the cryptocurrency market in 2021 hoping to make a nice return to beat some of the outrageous volatility in cryptocurrencies.
“At the time it was like crazy,” Hahn said. “There was all this hype in cryptocurrency and blockchain and euphoria. And quite frankly, people weren’t looking at it in terms of a use case, they were looking at it (and asking) how do I make the most money?”
One of the biggest topics emerging in this corner of the market is the ability to “tokenize” real world assets such as gold on a blockchain. Many at the event emphasized that this would give institutions the ability to provide more information and data to clients about their investments.
This isn’t the first time the institutional world has gotten excited about blockchain while pushing back the use cases of bitcoin and cryptocurrency. In 2015 and 2016, nearly every bank in the US went through a testing and learning phase using blockchain technology — private blockchains, not public ones like the Bitcoin network. This stage was more about the deployment of technology within private banking systems.
Now, “we’re seeing more maturation,” Hahn said, which he attributed to “regulations slowly entering place” and “more institutional players entering the space.”
“Last time, there was a bunch,” he explained. “Everyone kept talking about (how) ‘the institutions are coming, they’re coming’ — and then you waited a year, two, three, and you still didn’t see them come in droves. Now, open the doors wide? No, I don’t think so. But I think you You see a lot of things popping up in space….You definitely see a lot of experiments.”
He said that some of the experiments are an incremental step forward for the institutions. He said the larger move would take a lot of time.
Likes most of the big banks JPMorgan And Goldman Sachs which began testing seven years ago is still on the market, Han said. There are also more small investors such as family offices and smaller venture capital funds entering the market as well.
As for the cryptocurrency itself, “the investment side is still there,” but “the foundation will be tokenization.”
“Yeah, do some kind of allocation, but would you bet the farm on that? I don’t think so,” Hahn said, warning that there is still a high level of volatility and uncertainty and regulatory action to be taken. of institutional investors regarding these investments.”
“But at the same time, a lot of forward-thinkers are still participating, dipping their toes into putting pockets of capital aside and that makes sense,” he added. “They are looking forward to being involved and I think that will continue.”
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