‘Fear of the unknown’ is holding traditional investors back from crypto – Bloomberg analyst
Jamie Coutts, crypto market analyst for Bloomberg Intelligence, claims that “untruths” and “fear of the unknown” are what have held back traditional portfolio managers from investing in cryptocurrency.
Speaking to Cointelegraph at the Australian Crypto Convention over the weekend, Coutts claims that there has been an ongoing “falsehood” that “there is no intrinsic value in blockchains.”
“These asset managers own stocks, like Amazon and Facebook […] as in the early years these companies had no earnings,” Coutts explained, adding that Facebook in its infant stages “didn’t make a profit […] or seen to have any intrinsic value.”
“Yet they could understand that there is a network value here, that the network is growing, that the value of the asset comes from how many people use the products.”
Coutts believes that “while not all blockchains are cash-generating assets, including Ethereum,” there is certainly intrinsic value there.
However, the Bloomberg analyst said he couldn’t quite put his finger on why there was a reluctance to embrace cryptocurrency, ruling out a lack of regulation as a reason.
“Regulation cannot be one of them. Let me just repeat that. Regulation is always an issue, but BTC is regulated.”
Coutts said “it’s not really a regulatory risk” as crypto was regulated “the moment” it became a taxable item that you had to “disclose to the tax authorities in whatever jurisdiction you’re in.”
Instead, Coutts said it could be “just the fear of the unknown,” adding that asset managers ignoring or choosing not to educate themselves about cryptocurrency is a missed opportunity.
Coutts suggested that those hesitant to invest in cryptocurrency should look past market volatility and focus on what cryptocurrency actually brings to the table.
“The best we can do is understand the global trends that are taking place […] degradation and technological innovation, which crypto is at the intersection of. It puts the wind behind the sails of crypto as an asset class that should be considered for some allocation.”
Last month, Swiss asset management group Picket group advised against crypto investments “amid the latest turmoil in the industry.”
Picket Group CEO Tee Fong acknowledged that crypto is “an asset class that we cannot ignore,” but does not believe there is “a place for private bankers and for private banking portfolios.”
Related: Does Ethereum Merge Offer a New Destination for Institutional Investors?
Others suggest that institutional investors remain interested in crypto-related investments despite market conditions.
Apollo Capital Chief Investment Officer Henrik Anderson told Cointelegraph on September 14 that while institutional interest has been slow to pick up, there are many waiting on the sidelines and timing the market.
Anderson is optimistic about the future given that we’ve already “seen several of the big banks here in Australia taking an interest in digital assets,” with “ANZ and NAB” choosing to focus on “stablecoins and traditional asset tokenization rather than crypto investments” . Specifically.”
