Investment management firm State Street says institutional clients are not deterred from investing in crypto assets despite the drop in price. “There’s a belief that the asset class is here to stay” said a State Street executive.
State Street on institutional demand for crypto-currencies
State Street, a leading investment management firm, is seeing steady institutional demand for crypto-currencies, despite market declines, the Sydney Morning Herald reported Monday.
Irfan Ahmad, chief product officer of State Street Digital, said the banking giant’s institutional clients are still interested in crypto-currencies and their underlying technology. He was quoted as saying:
During the June and July period, when things really heated up in terms of activity, we saw institutional clients not necessarily doubling down on their investments, but they weren’t really deterred from placing strategic bets on the asset class itself.
“What comes out of this is that, I think, there is a belief that the asset class is here to stay“, the executive emphasized.
State Street operates in more than 100 geographic markets around the world and employs about 40,000 people. As of June 30, the financial services giant had $38.2 trillion in assets under custody and/or administration and $3.5 trillion in assets under management.
The company’s digital arm, State Street Digital, provides solutions for a range of digital assets, including cryptocurrencies, stablecoins, digital currency and central bank digital currencies (CBDCs), according to its website.
Ahmad noted that a number of large investment firms, such as Goldman Sachs, have begun offering crypto products and are likely to make further moves into the crypto space. In April, Goldman Sachs offered its first bitcoin-backed loan.
The world’s largest asset manager, Blackrock, launched a private trust in bitcoin in August. “Despite the sharp decline in the digital asset market, we are still seeing substantial interest from some institutional clients“, the company said.
The State Street executive added that institutional clients have asked to launch crypto products, saying:
Certainly our clients have talked to us in a more pragmatic way about how they might launch products, or what we might do in the future to help them support the launch of those products.
In July of last year, State Street announced the expansion of its crypto-currency service, citing the explosion in demand for traditional funds.
Crypto-currency exchanges are also seeing growing demand from institutional investors. Bitstamp’s CEO said in August that its exchange platform is seeing a “Massive interest in crypto-currencies” from institutional clients. In June, Binance launched a new platform for VIP and institutional crypto investors to increase support for institutional clients.