Banking giant State Street says global asset managers are undeterred by the cryptocurrency “winter” as they prepare to launch a barrage of new digital assets and crypto products.
The price of cryptocurrencies has plunged this year as interest rates have risen, with bitcoin having fallen more than 50% since January in what has been dubbed a “crypto winter”.
However, the rush for new financial instruments attached to the crypto trend would indicate that traditional players are betting on the asset class to stay.
Irfan Ahmad, digital manager for Asia-Pacific at State Street Digital, said the company’s institutional clients have always been interested in crypto and the underlying technology that supports digital assets.
State Street is the largest custodian bank in the world, meaning it holds financial assets on behalf of investment managers. He works with asset management firms looking to gain exposure to the crypto sector.
“During the period of June, July where things really warmed up in terms of activity, we saw institutional clients not necessarily doubling down, but they weren’t really deterred from placing strategic bets on the asset class itself,” Ahmad said. in an interview.
“The takeaway is that I think there is a belief that the asset class is here to stay. And we as asset servicers will obviously partner with our clients where they believe their ambition lies.
With the exception of Commonwealth Bank, which last year announced a crypto investment pilot that has since experienced regulatory delays, most Australian financial institutions have shunned cryptocurrencies, considering them too risky. .
However, some foreign giants are turning their attention to crypto assets. Last month, Goldman Sachs launched its first Bitcoin-backed loan, while investment giant BlackRock launched a product that gives institutional clients exposure to Bitcoin.