Asset managers dive into crypto despite bear market

YEREVAN (CoinChapter.com) – New digital offerings from leading asset managers and investment vehicles in the fiat economy grace the market as the total market cap of crypto assets slashed in half since November heights. The sector’s market cap stood at $1.13 trillion on Aug. 13, 60% lower than the record high of $3 trillion.

Top-tier companies avoid offering clients direct crypto exposure due to the market’s high volatility. However, they are finding new ways to monetize investor interest by signing deals or launching products tied to digital assets.

Fiat economy embraces crypto.

British Financial Times Stock Exchange 100 Index, or the FTSE 100-listed ABRDN, jumped on the bandwagon and purchased a stake in digital asset exchange Archax. As a result, the asset managing giant’s dap into the crypto market might trigger other companies and ventures to follow suit.

Meanwhile, BlackRock, the largest money manager globally, announced its plans to launch a spot Bitcoin trust for institutional investors. Additionally, the multinational corporation agreed to link its portfolio management software Aladdin to crytpo exchange Coinbase. The collaboration could present an easy way for over 82,000 professionals to expose crypto assets to their clients.

The move might come as somewhat ironic, considering BlackRock founder Larry Fink used to be among the skeptics. In 2017 the executive called Bitcoin proof of “money-laundering demand” on the market.

Additionally, Chris Brendler, a senior research analyst at DA Davidson, commented on the matter, saying that the corporate attitude towards crypto assets has shifted.

Large asset managers are starting to consider this a real investment. I think it’s a major data point in terms of traditional asset management companies embracing what really, for years has been almost ridiculed.

said Brendler.

Will asset managers win or lose?

Charley Cooper, managing director at blockchain firm R3 and a former top staffer at the US Commodity Futures Trading Commission (CFTC), agrees. He asserted that while the crypto market had lost close to 2 trillion in the previous months, well-heeled investors signed deals with a vote of confidence.

Deals like this are not thrown together last-minute. These things have been in the works for months if not years. It’s not like they decided to do it on the fly.

said the expert.

However, others argue that crypto volatility should be a “red flag” for anyone. Additionally, the regulatory skepticism around the digital asset class might stave off potential investors.

Dennis Kelleher, head of Better Markets, an investor advocacy group based in Washington, argued the point. He warned consumer groups against following trends set by big companies. “Just because top-tier companies want to make money from something new, that doesn’t make it a good thing to do,” said the expert.

Also read: Bitcoin (BTC) Hesitates But Further Gains Seem Likely: Here’s Why.