The herd is coming? It’s here. Recent institutional crypto adoption to keep you long-term bullish
For a good couple of years, often touted by Galaxy Digital’s Mike Novogratz, “the herd is coming” has been a rallying cry for institutional adoption of crypto. There’s a great deal of evidence that the herd has been shuffling in for a while.
No, it’s not exactly a stampede yet, but when you look at who/what’s been getting involved, it’s significant, and in this article, inspired by the tweet below, we’ll recap some of the more recent, large crypto-adoption news.
Concerns and conspiracy theories about Wall Street market manipulation aside, in order for the crypto market to seriously break out beyond (admittedly quite big) niche territory and reach a market cap of tens of trillions, mass adoption quite obviously needs to grow.
And from our point of view, it very much appears to be doing that, bit by bit.
A tweet from the Co-Head of Venture at Brevan Howard Digital, Peter Johnson, caught our eye today, and it’s a brilliant breakdown of said institutional sentiment and crypto-industry moves from large players.
"The Institutions Are Here" 🧵
For years, the crypto community has been saying "The Institutions are Coming"… and for a long time, we were wrong. Now, in the depths of a bear market, it is becoming clear the institutions are indeed here. Starting with some data…
— Peter Johnson (will not dm) (@TheChicagoVC) November 6, 2022
We recommend reading the thread for yourself, but we also touch on elements of it, and a few other things, below.
Boston-headquartered financial services giant Fidelity has been in the crypto news quite a bit recently. As Peter Johnson from Brevan Howard (also a bigwig in the investment management stakes) notes, Fidelity recently released a pretty bullish report regarding institutional investment sentiment.
One of the key takeaways was this: of the 1,052 institutional investors surveyed, 58% currently hold digital assets, and 74% plan to buy or invest in them.
In other Fidelity news, the investment titan has revealed it plans to launch a commission-free crypto-trading platform called Fidelity Crypto, targeting retail investors to trade Bitcoin and Etheteum.
This is in addition to the EDXM crypto exchange it’s established with Charles Schwab and Citadel Securities aimed at both institutional and retail investors.
America’s oldest bank, the Bank of New York Mellon Corporation (aka BNY Mellon), recently announced that it can now custody crypto (initially just BTC and ETH), after receiving regulatory approval to do so.
Meanwhile, it also conducted a survey of 270 institutional investors, revealing that 97% agree that digital tokenisation will revolutionise asset management.
And 88% of the survey’s participants said they’re planning to move forward with current plans around digital assets despite bearish market conditions.
On average, 29% was the amount of their portfolio these investors said they would allocate to digital assets in roughly 2-5 years, given the right regulatory conditions and infrastructure.
Chicago Board Options Exchange (CBOE), one of the largest US equities market operators, recently announced it’s distributing market data on the Pyth blockchain network, also marking a tentative move into the decentralised finance landscape.
“We are curious about the DeFi landscape, and feel that participating in Pyth gives us the ability to learn what it is like to be a part of this new market,” Catherine Clay, head of data and access solutions at CBOE, said in an interview, according to a Bloomberg article.
Following the news it jumped into bed with US crypto exchange Coinbase, the US$10 trillion+ asset manager BlackRock recently announced that it launched a spot Bitcoin trust for private institutions.
The world’s biggest asset-holding hog and real-life Monopoly winner also has a partnership with the issuer of stablecoin USDC, Circle.
A few days ago, on November 3, Circle revealed it’s deepening that involvement and is beginning to transfer USDC reserves into a BlackRock-managed fund that’s registered with the U.S. Securities and Exchange Commission (SEC).
If those news bites don’t convince you about the broadening uptake of mainstream crypto and blockchain adoption, here are a few more…
• Google. The tech titan’s cloud-computing platform, Google Cloud, recently announced it will be launching a “node engine” for Ethereum projects.
Similarly, the service confirmed over the weekend, at its Breakpoint conference event, that it will become a node validator for the Solana blockchain.
Validator nodes effectively verify, vote on and maintain a record of transactions on a blockchain network.
• GameFi. There’s been plenty of big GameFi funding news this year – see our recent Animoca Brands and Immutable articles, for example. But here’s another one.
There’s fresh news today that tech multinational Microsoft is backing Wemade – a Korean-based gaming company that’s been making a big push into the world of blockchain.
Wemade confirmed in a press release that it has raised US$46 million from Microsoft, Shinhan Asset Management and Kiwoom Securities.
As TechCrunch reports, Wemade is best known for its hit title The Legend of Mir, which at its peak reportedly had more than 200 million signups/players.
• NFTs. Late last week, Meta announced that its Instagram platform will be allowing users to mint and sell non-fungible tokens on the Polygon (MATIC) blockchain. Huge.
Also, both Facebook and Instagram are enabling the connection of web3 wallets and NFTs, with supported blockchains including Ethereum, Polygon and, soon, Solana.
As Johnson points out, too, in his crypto-adoption Twitter thread, Apple “now explicitly allows apps to list, mint, transfer, and view NFTs, which will lead to increased use of NFTs in app experiences.”
He notes that this, however, “does comes with the downside of Apple also including NFT purchases within the IAP 30% charge.”
We’re scratching the surface here and we’ve certainly covered a good deal more crypto-adoption and big funding stories here on Coinhead. (Although we also recommend this excellent October overview from Kraken, which notes some of the major happenings from that month.)
In short, while this nascent industry navigates a difficult year amid gloomy macroeconomic skies, and has an annoying tendency to shoot itself in the foot (Terra LUNA, Celsius… er, potentially FTX?) there is always plenty of daily news to reinforce the notion that its long-term future is brighter than Chris Langan wearing freshly OMOed whites.