In the aftermath of the Terra debacle and the bankruptcy of Three Arrows Capital (3AC) and trouble with several other crypto firms, it would be natural for one to think that the crypto industry could be undergoing distress and may need some time to get out of the current winter. This situation has been made worse with a strong dollar macro headwind, which would suppress crypto prices since they are quoted in dollars.
However, activities within the space itself with regards to adoption has been gaining ground even when media headlines are mostly bearish and crypto prices appear to be in the doldrums. In particular, institutional adoption for crypto has picked up pace in the last two months as the dust on Terra and 3AC begins to settle.
Below, we give a summary of some major institutional adoption news that occurred over the past two months. These may have been overlooked by some investors as there does not appear to be much media coverage on them.
BlackRock Launches Bitcoin Trust
The series of positive institutional adoption began in August, when BlackRock, the largest asset manager in the world, launched a spot Bitcoin private trust to give its customers exposure to Bitcoin. This product could be BlackRock’s solution to the SEC’s refusal to allow for a spot Bitcoin fund and enables institutional investors a new gateway to enter into the spot Bitcoin market, instead of having to rely on derivatives. While not sounding like a big deal, this step taken by BlackRock is a huge step forward for Bitcoin adoption as with this product, institutional investors who were not able to purchase Bitcoin in the spot market are now able to, which could drive demand for actual Bitcoins.
BlackRock further revealed that it is also seeing substantial interest from its institutional clients with regards to stablecoins and tokenization. The idea of BlackRock adding stablecoin trusts will be a huge winner for crypto and may bring about a big movement of funds from the traditional investment space into crypto. This ought to be a development that should be closely followed.
Fidelity Launched Ethereum ETF
At the end of September, another of the world’s largest asset managers, Fidelity, launched an Ethereum Index Fund that tracks the price performance of the Fidelity Ethereum Index PR benchmark through passive, direct ownership of Ether.
The Fidelity Ethereum Index Fund is available to accredited investors and is the second fund launched by Fidelity Digital Assets’ digital asset management business after a two-year hiatus. The digital asset management firm first launched the Wise Origin Bitcoin Index Fund I in 2020 and overwhelming client demand for digital assets beyond Bitcoin has prompted the firm to set up the Ethereum fund.
October Rings In More Positive News
Other positive news came the moment we stepped into October, with internet giant Google announcing crypto integration. Google will start accepting crypto as payment for its cloud services early next year through Coinbase. As part of the deal, Coinbase Commerce will move its data-related applications from Amazon Web Services over to Google.
In fact, Google’s lean towards crypto is also seen in its google search engine, which has recently added Ethereum wallet lookup function. One can now simply input an Ethereum compatible address on the google search engine to be able to see the wallet’s information on Etherscan.
Following Google’s announcement, the 239-year old Bank of New York Mellon (BNY Mellon) also launched its own Bitcoin and Ethereum custody service for US clients on the same day. This service will include holding clients' private keys and providing accounting on their crypto portfolios. This move follows BNY Mellon becoming the custodian for the cash reserves that back Circle's USDC stablecoin in March. Last year, BNY Mellon had already launched a Bitcoin custody service in Ireland, and these follow up steps only prove that one of the oldest prime service banks in the USA is slowly but surely making its way into the crypto business.
Ark Investment Reiterates $1 Million Per Bitcoin View
Other than positive adoption news, views from traditional market experts on cryptocurrencies are also getting better. The latest expert to opine bullishly on crypto is the team from Ark Investments, with both CEO Cathie Woods and analyst Yassine Elmamdjra commenting on different occasions that they think Bitcoin will hit $1 million by 2030.
In an interview with Bloomberg last week, Elmamdjra spoke about how Bitcoin has been successfully navigating through the harsh crypto winter of 2022 even under severe macroeconomic headwinds. Elmamdjra further elaborated that Bitcoin, being a digital store of value, to a settlement network, to an insurance policy against arbitrary asset seizure all at the same time, would give it a $28 trillion market cap by 2030, which would translate into a value of $1 million per Bitcoin using its total supply cap of 21 million units.
