Investment management firm State Street says that institutional clients are not deterred from investing in cryptocurrencies despite falling prices. “There is a belief that the asset class is here to stay,” said a State Street executive.
State Street in institutional demand for cryptocurrencies
State Street, a leading investment management firm, sees persistent institutional demand for cryptocurrencies despite market selloffs, the Sydney Morning Herald reported on Monday.
Irfan Ahmad, State Street Digital’s product leader for the Asia-Pacific region, said institutional clients of the banking giant are still interested in cryptocurrencies and their underlying technology. He was quoted as saying:
During the June and July period, when things got very hot in terms of activity, we saw institutional clients not necessarily double down, but they weren't really deterred from making strategic bets on the asset class itself.
“The advantage of this is that, I think, there is a belief that the asset class is here to stay,” the executive emphasized.
State Street (NYSE: STT) operates in more than 100 geographic markets globally and employs approximately 40,000 people worldwide. The financial services giant had $38.2 trillion in assets under custody and/or administration and $3.5 trillion in assets under management as of June 30.
The company’s digital arm, State Street Digital, offers solutions for a variety of digital assets, including cryptocurrencies, stablecoins, digital money, and central bank digital currencies (CBDCs), according to its website.
Ahmad noted that several large investment firms such as Goldman Sachs have started offering crypto products and are likely to make more forays into the crypto space. In April, Goldman Sachs offered its first bitcoin-backed loan.
The world’s largest asset manager, Blackrock, launched a private bitcoin fund 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 further shared that institutional clients inquired about the crypto product launch, explaining:
Certainly our customers have been talking to us more pragmatically about how they can launch products or what our capabilities might be in the future to help them support the launch of those products.
In July of last year, State Street announced the expansion of its cryptocurrency service, citing growing demand for traditional funds.
Cryptocurrency exchanges are also experiencing increasing demand from institutional investors. Bitstamp’s chief executive said in August that his trading platform is seeing “huge interest in crypto” from institutional clients. In June, Binance launched a new platform for VIP and institutional crypto investors to increase support for institutional clients.