By Bill Taylor, Contributing Editor
Most people have become aware of bitcoin and cryptocurrencies only within the last year or so. When media hype hit full stride as bitcoin hit $20,000, it would be fair to assume those same people probably thought “the big boys/girls” (large financial institutions) were all in. THEY WOULD BE WRONG! In fact, it is only within the last month or so that many of the larger hedge funds, family offices, banks, etc. have been “sniffing” around the crypto space and tip-toeing in to the crypto pool. Its changing…..rapidly.
A big announcement came last week from Goldman Sachs, which is opening a trading desk to facilitate clients trades in bitcoin. That was followed on Sunday with the announcement that the CME Group and London-based CryptoFacilities (crypto exchange) have introduced an Ethereum reference rate and real time index. You may remember FintekNews covers (and reports daily M-F) on the CME’s and CF’s bitcoin reference rate (BRR) and bitcoin real time index (BRTI), which was first launched back in 2016. That was groundbreaking. These recent events are coupled with the NYSE planning its own crytptocurrency exchange, George Soros saying his family office is investing in bitcoin and…..well, the list is long.
Why the big push? First, there is more oversite paving the way for more regulation which gives cryptos a huge credibility stamp of approval. Also, the institutions can NOT invest in anything that doesn’t have rules. With regulated exchanges, new guidelines, etc., the door is opening for investment. Again, why are these regulatory ‘things’ happening now? Because the rest of the world is already there and business is going offshore. Or will if things don’t change here in the U.S.
So, with the CME Group, the NYSE, Nasdaq and others pushing the SEC and CFTC to give them rules, things are really speeding up on the crypto front. There is way too much money waiting on the sidelines to get into the fast growing digital asset/cryptocurrency sector and U.S institutions do not want to be left out. The door is just opening for the next growth spurt for cryptos.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews