As Bitcoin’s impressive bullish run continues, it wouldn’t be surprising to see crypto-FOMO reach institutional investors as well.
With the crypto sector currently in a wave of bullish sentiment, as evidenced by the fact that Bitcoin Up passed its all-time high of $19,892 earlier this month, both causal and institutional investors around the world are now more interested in the growing sector. For example, on December 3, the S&P Dow Jones Indices announced that it is launching several crypto indices, with a report of 550 currencies appearing starting next year.
The aforementioned offerings will be facilitated by S&P Global in conjunction with the CME Group and News Corp. As part of the press release announcing the launch, a spokesperson for S&P’s DJI alluded to Bitcoin and other prominent altcoins such as Ether (ETH) and Bitcoin Cash (BCH) as part of an attractive „emerging asset class.
Fidelity on Bitcoin: What do your analysts say?
S&P DJI also informed that it will join the data provider chain Lukka to launch the aforementioned indices. As a result, some in the crypto community are of the opinion that the industry has finally made permanent inroads into the conventional financial world. Stephen Stonberg, chief financial and operations officer of Bittrex Global, told Cointelegraph that while the announcement has been definitely welcome, conventional consumer adoption has been imminent:
„This is more a continuation of an existing trend than a turning point. By placing the risk of cryptic assets in the form of a traditional ETF-based index, this should provide additional access points to the crypt market for mainstream investors. This will compete with the high-cost BTC-only products that are now available to this audience.
However, Douglas Borthwick, director of marketing for the INX exchange, provided an alternative view that, while cryptomoney is certainly making its mark on the traditional financial ecosystem, it still has a long way to go. He added that „crypto“ is not just „Bitcoin“ but offers so much more: „There are so many categories these days that fit under the umbrella of ‚crypto‘. There’s sure to be a permanent impression. But that impression remains one of skepticism as opposed to one of future.
That said, the S&P DJI movement shows a clear commitment by the major players to embrace Bitcoin and other digital currencies. For example, earlier this month, the Grayscale Bitcoin Trust increased in tandem with its premium, which surpassed the 30% mark on December 3, serving as a clear indicator of increased institutional demand for cryptomonies.
Institutions will benefit
According to Stonberg, the latest move by S&P’s DJI essentially involves trading digital/tokenized assets in the format of a traditional equity product that is traded during standard trading hours. In short, it is a way of taking money from institutional stocks indirectly into crypto space, a process of convergence between traditional financial markets and crypto, which is likely to take a few years to occur.
Bitcoin will eat up gold market share, according to analysts at JPMorgan
On the subject, Anton Churyumov, founder of Obyte – a DLT based on directed acyclic graphics technology – told Cointelegraph that institutions will always pursue anything that makes money for them and their customers, adding:
„With crypto indexes, the asset class is better recognized and easier to sell to customers. Perhaps even more importantly, with DeFi, crypto currencies now have a much wider choice of instruments that appeal to different investors, for example, there are now stablecoins for more conservative investors.
Jack Tao, CEO of Phemex – a crypto-currency exchange headed by former Morgan Stanley executives – believes it will soon be unsurprising to see an explosion of new services and products, making this domain even more attractive to members of the traditional financial sector: „I’m pretty sure these giants won’t want to miss the crypto-currency train. This is just the beginning, I hope to see many more funds and investments soon.
Will FOMO prevail?
As crypto-currencies continue their long-term price rise, it is worth investigating whether institutional investors will embrace crypto-FOMO – the fear of being lost or left out. In this regard, Sarah Austin, head of content at Kava Labs – a decentralized financial company – told Cointelegraph that, according to her sources, operators