According to a survey by Thomson Reuters, one in five financial institutions are thinking about trading digital currencies at some point over the next year. Despite the lull in prices so far in 2018, it appears that many are seeing opportunity thanks to the volatility associated with the space.
Is This the Beginning of Institutions Taking Public Positions in Crypto?
The survey published today was put to over 400 of Thomson Reuters Corp’s clients. These included asset managers, hedge funds, and trading desks associated with the world’s largest banks. Twenty percent of those asked indicated that they had thought about buying and selling digital assets at some point in the next twelve months.
The co-head of trading at Thomson Reuters, Neil Penney, spoke to Business Insider earlier today about the pending rise in institutional investment in digital assets:
“Cryptocurrency is still a relatively small part of the trading market, but this survey makes clear this niche segment is starting to enter the mainstream of the financial services industry. This is a major change from a year ago.”
Unfortunately, today’s survey was the first of its kind by Thomson Reuters. As such, there are no such figures to help determine the change in institutional interest in digital currencies over the last twelve months.
Many crypto analysts had wrongly assumed that the launch of the CME and CBOE Bitcoin futures markets last December would signal an influx of money from traditional investment sectors. However, these particular financial products have not proved nearly as popular as some had hoped.
This hasn’t dampened enthusiasm for cryptocurrency trading too much, however. Of the 20% of survey respondents who affirmed that they were considering trading digital currencies in the next twelve months, over two thirds of them said they were planning on entering the market in the next three to six months.
Financial regulators have begun to clean up the space of fraudulent companies and blatant scams and it is this maturing market, along with the dramatic volatility and potentially limitless upside potential of certain crypto projects, that is currently attracting such institutional interest to trading digital currencies.
Already this week, we’ve reported about Goldman Sachs’ new appointment of Justin Schmidt to their cryptocurrency markets unit. This highlights a very real commitment to helping their clients get the exposure to digital assets that they’re obviously seeking. It appears from the Thomson Reuters survey this week that many more will follow Goldman’s lead in the coming months.