Morgan Stanley's research division just completed a study and is comfortable declaring that bitcoin and other cryptocurrencies are an institutional asset class. This past year has seen not only a huge sell-off in the crypto space, BUT also a huge build-out of an infrastructure to accommodate institutional entry into the sector. Interestingly, the study found that the number of retail investors remained stagnant while institutions were gearing up. One BIG change - the word crypto is fading out and "digital cash" is the new preferred definition. Sounds much more acceptable in the proper (regulatory) circles. Looking ahead, 2019 could be "the year" in the digital asset space as even bigger institutions jump in. Read more details below.
(Bill Taylor/ Fintek Capital)
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Institutional investors are increasingly getting involved in bitcoin and other cryptocurrencies – while the number of retail investors in the space is staying stagnant – according to a new report by Morgan Stanley.In an update to "Bitcoin Decrypted: A Brief Teach-In and Implications," the global banking giant's research division delved into the last six months of bitcoin and highlighted certain trends it noticed. The report is dated October 31.
Perhaps most notably, the report emphasized its writers' view of the market's "rapidly morphing thesis," which began by defining bitcoin as "digital cash" and noting that investors had full confidence in it, to a solution for issues in the financial system, to a new payment system to ultimately a new institutional investment class.
Various issues and discoveries around the bitcoin ecosystem have caused the thesis to evolve, including the permanent ledger recording all transactions, a number of hacks, hard forks, new technologies which are cheaper than bitcoin, market volatility and other concerns, the report explains.
As such, the market's current thesis appears to be that bitcoin is a "new institutional investment class," and has been for almost a year, the authors wrote. The amount of crypto assets under management has been increasing since January 2016, with $7.11 billion currently being stored by hedge funds, venture capital firms and private equity firms.."
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