With Bitcoin scaling new heights once more, the debate on the veracity of the cryptocurrency’s latest rally is picking up.
What isn’t up for debate is rising institutional interest in the largest digital asset. BlackRock, the world’s largest asset manager, is among the large investment firms getting involved in the crypto space.
“BlackRock’s Rick Rieder told CNBC on Wednesday the world’s largest asset manager has begun entering the bitcoin space,” reports Kevin Stankiewcz for CNBC. “The remarks from Rieder, who is BlackRock’s chief investment officer of global fixed income, came on the same day bitcoin broke above $51,000 for the first time.”
Is the BlackRock Play a Sign of Things to Come?
Institutional investors are playing an increasingly prominent role in the Bitcoin market, and that role is likely to continue growing. For smaller investors, there are tangible benefits to this scenario.
Cryptocurrencies remain largely unregulated, which has deterred many potential investors. The Securities and Exchange Commission has so far rejected exemptive relief for any attempt to roll out a Bitcoin ETF, arguing that there is not enough protection against fraud and market manipulation in the cryptocurrency market. However, institutional investors are moving past those concerns and embracing Bitcoin in a big way.
The hesitance once seen around cryptocurrencies is slowly starting to dissipate as more institutional investors start taking the assets more seriously. Today, many market observers believe the time is right for institutional investors to get more involved with Bitcoin.
“A number of other financial institutions, such as BNY Mellon and Mastercard, have made entrances into the crypto space in recent days. BNY Mellon, the nation’s oldest bank, will launch a digital assets unit later this year, while Mastercard intends to support certain cryptocurrencies on its formal network,” according to CNBC.
Supply of Bitcoin is dwindling because institutional investors are piling into the market and many retail investors are holding onto the cryptocurrency for longer periods of time.
Asia is seeing particular interest in rising institutional investment. China is working on a state-backed cryptocurrency offering, with the help of major private industry players.
“My sense is the technology has evolved and the regulation has evolved to the point where a number of people find it should be part of the portfolio, so that’s what’s driving the price up,” Rieder said in the CNBC interview.
For more news, information, and strategy, visit the Crypto Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.