Nikolay Storonsky, the founder of the banking application Revolut, recently returned to lower trading volumes in Bitcoin markets. In particular, he said the demand from institutional investors was still far too weak to stimulate activity around the first digital currency.
In recent months, many media have echoed the imminent influx into the crypto sphere of many institutional investors – savings collectors, such as pension funds or insurance companies.
Last October, Bloomberg quoted Bobby Cho, the trading executive of the crypto-investment firm Cumberland, as saying that more and more of these entities were hoping for crypto-markets.
“Over the last four to six months, prices have moved in a narrow range, and this seems to coincide with the change in attitudes of some traditional financial institutions, who are more comfortable with the idea of interacting with this. ecosystem, “he said then.
Mike Novogratz, a strong supporter of Bitcoin and head of the investment company Galaxy Digital, said a few weeks ago that a “FOMO” feeling – the fear of missing out on a lucrative investment – would probably soon be seize many companies from the world of investment. He expected this capital to flow to crypto markets by July 2019 – which he believes would allow them to regain their record valuation of last January, more than 800 billion dollars.
“This FOMO has not yet manifested, we will soon reach a pivotal moment,” he said, before stating that pension funds should be the first major entities to bet on the crypto-sphere.
More recently, banking giant Morgan Stanley has released a report that institutional investors are increasingly interested in this ecosystem.
Investisseurs institutionnels : une demande encore très faible
Some observers believe that if institutional actors have not yet entered the crypto sphere, it is primarily because of a lack of regulatory clarity around digital assets.
But for the Bloomberg media, it would rather translate a weak appetite of these organisms for the crypto-currencies:
“The biggest drag on the arrival of Wall Street behemoths in the crypto sphere comes from their customers, rather than regulators,” says the website of the US financial group.
In his article, he quotes Nikolay Storonsky, the founder of the British company Fintech Revolut. Valued at $ 1.7 billion, this company offers an application that offers its users a range of banking services, and that allows them for some months to buy Bitcoin, Ether, Litecoin, Bitcoin Cash and XRP.
At the 2018 Web Summit held last week in Lisbon, the young entrepreneur said the Wall Street corporate giants were not showing signs of interest in crypto-currencies at the moment. A finding that could complicate the task of companies such as ICE or Fidelity, which will soon offer institutional players financial products backed by digital assets.
“Unless big institutional and investment funders are turning massively into the crypto sphere, I do not think banks will go that way, because their job is to make money from their money. customers, “he said. “So far, there is no sign of interest from large institutional investors.”
A viewpoint shared by Larry Fink, the CEO of the BlackRock asset management juggernaut. He had recently said that his company’s customers were not interested in cryptocurrencies.
And to give a diaper last week, in an interview with CNBC. Mr. Fink added that his company would not launch an index fund (ETF) backed by cryptocurrencies until the ecosystem became “legitimate”. However, he said that BlackRock did not give up definitively to offer investment products related to digital assets.
Many financial institutions on the verge of offering crypto-products to their customers
At the same time, a growing number of financial institutions, some of which were hitherto hostile to cryptocurrencies, have decided to turn to them. We can quote Morgan Stanley, Citigroup, Goldman Sachs or ICE, the company that manages the New York Stock Exchange.
But despite these positive ecosystem initiatives, Storonsky is keen to remain cautious. In particular, he recalled that Revolut’s Bitcoin trading volumes were 5 times lower than in December 2017.
For the entrepreneur, if a recovery were to occur in the coming months, the big banks should not be the first to benefit.
“Fintechs will, in the near future, have considerable weight in the crypto sphere,” he said. “I do not think the banks will be able to catch up again.”