How Institutional Investors are Interacting with the Digital Assets space
Huge thanks to Woodstock Fund for featuring our CEO, Tuhina Singh’s quote on their November newsletter: Rising Institutional Participation
The institutional investor’s interest in digital assets — a unique asset class that includes Bitcoin, stablecoins, and a plethora of other forms of digital “tokens” — has soared in recent months, as has their price action. In 2021, the market cap of digital assets increased by 300 percent, reaching more than US$ 3tn in Nov ‘21. Bitcoin, the most prominent digital asset, achieved a new high in Nov ’21, surpassing US$ 69,000 per unit.
Tuhina shared insights on how institutional investors are interacting with the digital assets space over the past 2+ years.
“Institutional investor demand for digital assets is rising exponentially now. Mainstream financial institutions are racing to provide research coverage and setting up trading desks in response to the massive demand spike they have seen in the last 18 months. However, they are still far behind what is required.
The institutions and investors want access to digital assets, but also want to be handheld in the process. However the traditional financial advisors are unable to support them fully since the tools and infrastructure they are used to, are not integrated with the crypto ecosystem as yet.
For the most part, the crypto ecosystem lies squarely outside of the legacy /traditional financial systems. The need of the hour is creating the bridges between tradFi and DeFi in a seamless, convenient, and safe manner. Wrappers like ETF on crypto are an example of creating such accessibility in a tax-efficient and compliant manner.
Propine has also set up institutional-grade custody, prime brokerage, income generation, and investment banking solutions that allow access to DeFi world through a regulated window. Such solutions take regulatory, taxation, and security risks out, providing a well-understood framework for investment in the fastest rising asset class in the world.”