Institutional investors not deterred by crypto winters

Institutional investors are unaffected by the current crypto winter and have maintained interest in blockchain and digital assets, according to megabank State Street.

Speaking to Australian news outlet Sydney Morning Herald (SMH) on September 11, Irfan Ahmad, the Asia Pacific digital head of the bank’s crypto unit State Street Digital, emphasized that despite extreme volatility throughout June and July, the firm’s institutional clients have continued to make moves in the sector.

“During the June-July period, when things really heated up in terms of activity, we institutional clients didn’t necessarily see doubling, but they weren’t really deterred from placing strategic bets on the asset class itself.”

Three crypto exchange-traded funds (ETFs) from Cosmos Asset Management and 21Shares launched on the Cboe Australia exchange in May, while asset manager Monochrome recently received approval to launch the country’s first Australian financial services licensed spot crypto ETF in August.

State Street is the fund manager for the Cosmos Purpose Bitcoin Access ETF in particular, and Ahmad told SMH that more crypto product launches are coming to Australia in the “very near future”, but did not outline any specific names.

“Certainly, our customers, they’ve been talking more pragmatically to us about how they might be able to launch products, or what our capabilities might be in the future to help them support the launch of those products,” he said.

Meanwhile, the Australian Securities Exchange (ASX) and Australian banking giants such as ANZ and NAB have been primarily focused on stablecoins and traditional asset tokenization rather than crypto investments specifically.

The Commonwealth Bank had a short-lived crypto trading service that was halted indefinitely in May due to regulatory uncertainty.

Abroad, major US institutions like BlackRock have been making serious crypto bets lately. Last month, the $10 trillion asset manager partnered with Coinbase to give institutional clients direct exposure to crypto and launched a private spot Bitcoin (BTC) trust.

Global investment bank Citigroup in August also hired two key executives in Ryan Rugg and David Cunningham as part of the firm’s Treasury and Trade Solutions (TTS) unit that oversees its institutional crypto offerings.

Related: Australian Treasury consults the public on the tax exclusion of Bitcoin foreign currency

Rugg signed on to be the global head of digital assets for TTS, while Cunningham was hired as director and strategic partner development for digital assets at the firm.

More recently, on September 7, Swiss digital asset banking platform SEBA Bank launched an institutional Ether (ETH) staking service to meet the growing demand for the yield-bearing asset ahead of the merger.