A report released by consulting firm Greenwich Associates says that over 70% of institutional finance executives surveyed believe that cryptocurrency will have a place in the future of the industry.
“They’re telling us that they don’t think it’s going away and that it’s here to stay,” says Richard Johnson, a vice president in Greenwich Associates’ Market Structure and Technology group and the author of the report.
The new survey found that the majority of the 141 institutional investment executives it polled believe that a regulatory framework will develop around cryptocurrencies, leading to growth and innovation, or that a few cryptocurrencies will survive and thrive, even if many others fail. 10% of respondents believe that cryptocurrencies will remain a fringe asset class without mainstream adoption, and another 10% said that a regulatory crackdown will eliminate the market altogether.
Survey of 141 financial executives regarding the future of cryptocurrency in the industry
It’s been an unquestionably tough year for digital assets: the market has fallen over 70% from its peak in January and regulatory uncertainty continues to cast a shadow over new and established projects alike. The SEC rejected nine filings for bitcoin ETFs last month, and despite some high-profile projects and partnerships, like the Intercontinental Exchange’s Bakkt, Northern Trust’s recent blockchain expansion, and Citigroup’s exploration of crypto custody solutions, institutional participation in cryptocurrency remains relatively low.
The report identifies two major areas under development that could help make cryptocurrency more accessible to banks, asset managers, hedge funds, and other large organizations: financialization, which involves the development of products like futures and ETFs that allow institutions to gain more exposure to cryptocurrencies, and custody, which has to do with how cryptocurrency is stored by its owner.
Johnson acknowledges these setbacks, but says his survey indicates sustained optimism in the space. He cited the two stablecoins from Gemini and Paxos that were approved this week by the New York Department of Financial Services as evidence of institutional progress in cryptocurrency. ”We’ve had a terrible market for crypto this year, but people are still coming out with a lot of great innovation and a lot of great ideas,” he says.