Crypto at the Doors of Big Institutions

Bryan Whalen, a portfolio manager at Los Angeles-based TCW Group has stated that crypto investors are seeking loans from large institutions to protect their digital assets.

According to Bloomberg, the comments were made at the Morningstar Investment Conference. Whalen stated that:

“The market is starting to knock on the doors of big institutions, even in the bond world.”

To raise money from investors willing to lend them money, borrowers issue bonds. It seems that crypto assets are becoming collateral for bond markets.

“What I’ve found has crept our way is incoming inquiries about the question of lending against crypto,” the asset manager added.

Crypto Becoming Mainstream

TCW’s Fixed-income group manages approximately $225 billion. However, it has not yet ventured into crypto assets. Fidelity Investments is one of the largest asset managers in the world and actively promotes the launch of a crypto-exchange-traded product.

Fidelity Digital Assets Group partnered last year with BlockFi to enable institutional clients to use Bitcoin collateral to secure cash loans.

According to the report, hedge funds, crypto investors, and miners were considered potential customers by the firm. They may be looking to convert their digital assets into cash, without needing to liquidate them.

Robin Foley is Fidelity’s chief investment officer for bonds.

“For us the role of crypto is really a cross-market, cross-company conversation. We are looking to the future as the market evolves.”

These moves have further legitimized cryptocurrency as an institutional asset type, but regulators in the U.S. remain cautious about them.

Bitcoin ETF on its way?

Fidelity Digital Assets executives met earlier this month with Securities and Exchange Commission officials in order to discuss the launch crypto-based exchange-traded goods.

Fidelity claimed that the Bitcoin and cryptocurrency markets have already reached “significant size” as well as having deep liquidity, according to the SEC’s standards.

Fidelity applied for a BTC-exchange-traded product, the Wise Origin Bitcoin Trust Trust, in March 2021. However the financial regulator continues its delays and has not approved a single one.

Mike McGlone, Bloomberg Intelligence Commodity Strategist, believes that ETF approval could be as soon as October. Stansberry Investor spoke with McGlone this week. He said that it would likely be a futures-based product, but it was a start.

Analysts also predicted that a Bitcoin-based EFT approved by the SEC could push Bitcoin prices to $100,000