Greenwich Associates released a report today as covered by Forbes surveying institutional finance executives and found that over 70% of them believe that cryptocurrencies will have a place in the future of the digital industry.
Despite the bearish sentiments there year, the report seems to confirm what we all suspected: by and large, cryptocurrencies are growing in legitimacy rather than shrinking. Out of 151 institutional investment executives polled, the vast majority believe that cryptocurrencies will form their own unique market and regulatory framework. Of the remaining respondents, only 10% believed that cryptocurrencies will remain a ‘fringe asset class’; another 10% believed that regulation would soon eliminate the entire market and it would cease to exist. One can only imagine how these numbers would have looked like just a year ago, when institutional acceptance was far lower.
Greenwich Associates is a marketing consulting company based in Stamford, Connecticut and has been around for over 40 years. Specializing in market sentiments and trends, they often conduct polling reports to gauge new markets. The report released signifies a significant boost in sentiments despite negative overall market sentiments. Upon release, the vice president of Greenwich Associates commented that the report clearly is “telling us that [fintech executives] don’t think it’s going away and that it’s here to stay.”
Of course, it’s been a difficult year for cryptocurrencies. From a 70% or so decline since January to regulatory uncertainty to SEC’s repeated Bitcoin ETF rejections, there seems to be less pronounced optimism in the market space. Yet, despite Citigroup’s recent report of crypto-related trading services, the release of Intercontinental Exchange’s BAAKT in November, and other positive developments, institutional involvement in the crypto space is still very low. The positive sentiments from fintech execs indicates that the space is still in its infancy.
The report also outlined a few key areas that would make cryptocurrencies more accessible to bigger-name existing institutions. One is the process of financialization which would involve the development of products like ETFs and more robust futures markets which would make it easier for institutional players to get involved. More importantly, however, is custodial services which would allow cryptocurrency-related assets to be stored en masse easily and without risk. Custodial services are already in the works by multiple banks and will soon become a streamlined process, but it remains the major problem with current adoption by established financial institutions.
Without these basic aspects, cryptocurrencies will be unable to be invested by fintech institutions. However, the long-term outlook looks promising.