Institutions have been funneling Billions of dollars into crypto all year And it seems like they're here for good But it's not all green candles and Rainbows Wall Street is split over what It means to adopt crypto and some Factions are less friendly than others We've got Larry thinkink on one shoulder And Jamie Diamond on the other Larry Just wants to send Bitcoin to Valhalla And launch stuff on ethereum but Jamie He would rather see crypto go extinct so He can promote his private permissioned Blockchain over our grave so which Faction will prevail and where could They take crypto keep watching to find Out back in January His Highness Gary Gendler honorable chair of the SEC Granted us permission to trade Bitcoin On us stock exchanges and it changed Crypto forever the floodgates of Institutional Capital burst open and Made Bitcoin exchange traded runs the Most popular ETFs of all time Satoshi Likely never imagined that 16 years into His pet project Wall Street would be Spending tens of billions of dollars to Hoover up the BTC Supply but for some That was always the dream now it's a Reality and we had better get used to it But if we have to share our turf with Trafi institutions we'd better gather Some Intel on how they plan on Interacting with crypto like like I said
Some of them aren't so friendly and if You thought Bitcoin becoming centralized In the hands of ETF issuers was our Biggest problem I've got bad news for You some of these institutions are Threatening a land grab they want to rub Us out of the picture and tokenize the World's assets on centrally controlled Private and permissioned blockchains Make no mistake this runs counter to the Whole ethos and purpose of crypto so to Find out more we're going to unpack a New report from Economist impact the Think tank arm of The Economist magazine It investigates Trends in how Institutional investors are approaching Crypto and this report is an interesting One because the economist is not known For being a crypto-friendly publication Previous highlights from The Economist Magazine's crypto editorials include Such gems as quote how crypto goes to Zero crypto's down fall Bitcoin ETFs are Off to a bad start and is this the end Of crypto and that's when they're in a Good mood The Economist also has at Least two articles and one YouTube video Explaining in great detail why crypto is Like a cockroach as such any crypto Report with the economist's name on it Should be treated like a live hand Grenade luckily for us though this one Was sponsored by okx institutional who Have managed to keep it refreshingly
apprach free the title of the Report is digital assets as the new Alternative for institutional investors Market dynamics opportunities and Challenges now as that title suggests The report takes a broad focus on Digital assets and distributed Ledger Technology these are sanitized Euphemisms for crypto and blockchain That also include centralized private Permissioned blockchains and the tokens That exist on them cbdc tokenized bonds And so on this will be important to bear In mind when you hear bullish sounding Statistics about institutional adoption Of digital assets because they're not Necessarily talking about crypto with That said though let's dig in hello Hello it's me guys cousin Barry I'm very Very sorry to be interrupting this no Doubt fascinating video but I want to Tell you about the coin Bureau deals Page so listen up and listen well all Right this is the place where you will Find all the amazing promos and Discounts what you as coin Bureau Viewers are entitled to so don't be a Mug go and check it out using the link Below you'll find discounts on Hardware Wallets you'll find exchange signup Bonuses some of which are absolutely Bleeding mental and you will find Trading fee discounts there as well as Well as a whole load of other goodies
Too and let me tell you old barington Here is at to am the Dog and Bone all Bleeding day and night to get you these Promos and discounts so you're welcome Thank you very very much go and have a Look Pronto or I have to come and have a Word all right the report begins with a Discussion of how institutional Investors are warming to all kinds of Digital assets including crypto Tokenized private funds and securities And allegedly nfts to illustrate the Point the authors highlight a 2023 Survey of institutional investors that Found 69% intended to increase their Digital asset Holdings in the next 2 to 3 years the respondents expected to Allocate an average of 7.2% of their Portfolios to digital assets by 2027 now It's hard to pin down how much of an Increase this would be from current Levels that's because institutional Investors allocations to digital assets Vary significantly depending on the size Type and risk appetite of the Institution the report says that on Average institutional investors allocate Somewhere between 1 and 5% of their Portfolios to digital assets depending On their risk appetite however it also Cites data showing substantially higher Allocations among smaller firms the Authors reveal an inverse correlation Between the size of an institution's
Assets under management and its Allocation to digital assets according To a survey cited in the report just 6% Of firms with more than $500 billion in Assets under management allocated ated Between 5 and 10% of their portfolios to Digital assets this is not particularly Surprising but for firms with under $50 Billion in assets under management it's A very different story more than a third Of this group allocated 5 to 10% of Their portfolios to digital assets on The extreme end this suggests some Smaller institutional investors could be Aping almost billion doar into crypto Which is crazy to think about but hold On a minute firms with under $50 billion In assets that's the vast majority of Companies in the world this category is Too broad to really tell us anything so Let's move on the report then says that Institutional investors digital asset Holdings are predominantly crypto this Makes sense because digital assets Usually refers to crypto after all the Vast majority of All Digital assets are Crypto so why do the authors make this Distinction if not crypto what digital Assets would institutions be holding Well one way to understand this is to Look at it through the lens of tradir Lined institutions like The Economist Who hate crypto but privately salivate Over blockchains and asset tokenization
They seem to have converged around the Language of digital assets and Distributed Ledger technology as a dog Whistle for people who want to Appropriate the Innovations and value Created by crypto without giving any Airtime to the actually existing crypto Industry and Market if trafi Institutions and governments insist on Using terms like digital assets and Distributed Ledger technology the reader Might not even realize that they're Talking about crypto and that is Probably the point but the truth is that The vast majority of All Digital Assets In existence are crypto and any talk of A digital asset Market that tries to Sidestep this fact is just wishful Thinking or it was until Recently adoption of private Permissioned blockchain infrastructure By governments and trafi is on the rise And we should expect to see consciously Non- crypto digital assets proliferate In the future of course this is to say Nothing of Cbdcs according to one 2023 survey cited In the report almost 40% of Market Participants including commercial banks In investment Banks wealth managers and Exchanges have at least one live project Involving digital assets and distributed Ledger technology up from 4% in 2020 now The reports language is a little vague
So let's look at two examples in 2022 HSBC launched its own private Permissioned blockchain Orion and plans To also offer a custody service for Blockchainbased assets excluding crypto So excluding almost almost all Blockchainbased assets well at least They're not going to have to worry about Network congestion anytime soon now thus Far Orion has been used to Mint a Tokenized gold product a multicurrency Bond in Hong Kong and a pound sterling Bond in collaboration with the European Investment Bank now they say imitation Is the sincerest form of flattery but it Wouldn't hurt if HSBC could just try Being nice to crypto too last year the Hong Kong monetary Authority had to Summon HSBC to ask why it was refusing Banking services to crypto firms in Hong Kong and earlier this year HSBC started Blocking all payments to crypto Exchanges in Australia is that any way To treat the industry whose code you're Copy pasting then there's JP Morgan CEO And diard crypto hater Jamie Diamond has Overseen the introduction of JP Morgan's Own Enterprise blockchain Onyx JP Morgan Website even promotes defi as one of Onyx's use cases but the word crypto is Nowhere to be found now Orion and Onyx Are only two of the most prominent Examples of the trend towards tokenizing Assets on private blockchains outside of
The crypto ecosystem this trend can also Be seen in tradire investors perceptions Of asset tokenization according to a 2023 survey of hedge fund investors 54% % of traditional hedge funds were Unlikely to invest in crypto over the Next 3 years yet the same respondents Reported being bullish on asset Tokenization with 31% believing it to be Quote the most significant future Market Opportunity this suggests that some Institutional investors perceive asset Tokenization as a trend distinct from Crypto rather than part of it and this Raises questions about the viability of Real world assets as a hot narrative and Use case in crypto if the anticipated Boom in asset tokenization is captured By private and permission blockchains Like Orion and Onyx it would be a Terrible missed opportunity for crypto And bad news for some of our portfolios Then again the report suggests that the Total market cap of tokenized assets is Going to rip a bare minimum of 27x Between now and 2030 when it's expected To break $10 trillion If that happens there should be enough Crumbs left over for our rwa microcaps To put in a few green candles right and Besides it's important to note that Trafi is not United in trying to rub Crypto out of the picture far from it Earlier this year Black Rock launched an
Asset tokenization fund on ethereum and Called it bidd so apparently we have a Dgen on the inside Black Rock was Actually beaten to it by Franklin Templeton who launched the first US Registered mutual fund on a public chain Back in 2021 their onchain US government Money market fund is now live on Arbitrum polygon Avalanche and Stellar Plus as the report points out more than $1 billion dollar worth of us treasuries Are now tokenized across public Blockchains including polygon Avalanche Stella ethereum and others for what it's Worth this is more than the combined sum Of bonds issued by Hong Kong and the European investment Bank on hsbc's Orion So probably no need to worry about Enterprise blockchains flipping ethereum Anytime soon but this digital assets Versus crypto dichotomy is certainly Something to keep an eye on because it Seems like we're at a Crossroads clearly There are hostile elements in finance And government who want to usurp crypto And blockchain with sanitized and Centralized digital assets and Distributed Ledger Technologies it's the Cbdc Paradigm basically on the one hand You have the biggest asset manager in The world charging head first into Crypto and making no bones about it Black Rock's bidd and Franklin Templeton's onchain mutual fund have
Brought hundreds of millions of dollars Onto public blockchains and you can't Really ask for a better vote of Confidence in the crypto ecosystem as it Currently exists I mean trillions would Be ideal but hey let's trust the process On that note crypto scored an enormous Victory this year which also made it Into today's report I am of course Talking about the spot Bitcoin and Ethereum ETFs in the United States it's The biggest story in institutional Adoption of crypto so far and as the Report puts it quote institutional Investors are exhibiting greater Optimism around digital assets Encouraged by the expanding availability Of a wider range of investment vehicles That include spot exchange traded funds Greater optimism indeed at the time of Making this video around 53 billion doar Have been invested into the spot Bitcoin ETFs alone so let's take a closer look At how they've performed earlier this Year reports filed with the Securities And Exchange Commission revealed that Some 944 institutional investors with assets Of at least $100 million bought into the ETFs in q1 for reference this is 10 Times the number of firms who reported Investing in gold ETFs black Rock's ibit ETF alone added 414 institutional investors in q1
Bloomberg's senior ETF analyst Eric Baluna said of ibits popularity quote It's absurd it's crazy a good first Quarter would maybe be 10 institutional Investors that's how hard it is and so To have 414 is just Bonkers institutional Adoption of crypto may still be nent but But since the ETF started trading we've Seen some interesting names enter the Ring in particular the Wisconsin State Investment board which oversees one of The biggest public pension programs in The United States aped almost $163 Million into spot Bitcoin ETFs in q1 According to David Krauss a professor of Finance at Wisconsin's Marquette University this investment was just a Quote toe in the water he told coindesk That he expects the board to invest much More and other public Pension funds to Follow suit in fact the Michigan State Pension Fund already has disclosing a $6.6 million investment in the arc 21 Shares Bitcoin ETF back in July however The biggest whale at the end of q1 was Millennium management one of the world's Largest alternative Asset Management Firms who had A2 billion position spread Across multiple spot Bitcoin ETFs Another notable name was Boston based Hedge fund Bracebridge Capital whose Clients include the endowments of Yale University and Princeton University in
Q1 Bracebridge disclosed a $343 million Investment split between ibit and Arc 21 Shares spot Bitcoin ETFs now I could Keep going but for more eyering Statistics about how successful those Spot Bitcoin ETFs have been you can Check out our fulllength video on the Topic here and what of the newer spot ETFs for for ethereum well the report Points out that they managed to break $1 Billion in trading volume on their first Day which is certainly nothing to shake A stick at since then they've been a Little underwhelming but mostly because Of the obscenely high bar set by the Spot Bitcoin ETFs before them for a Deeper analysis you can check out our Recent video on eth's underperformance Linked to in the description by the way But the short version goes something Like this the eth ETFs launched in the Middle of summer when trading volum Volumes are low and liquidity is thin After their first week of trading Financial markets around the world Tanked on the news that the bank of Japan was Raising its policy rate Sentiment has been in the toilet ever Since and the entire crypto Market has Been putting in lower highs to make Matters worse grayscale is dumping eth Constantly as investors exit its newly Liquid ethereum trust oh and a bunch of Market makers have also coincidentally
Been dumping hundreds of thousands of Eth too so look it's been a rough summer For most cryptos and basically I would Reserve judgment about the spot ethereum ETFs until market conditions improve as They say when in doubt zoom out except On the eth BTC chart don't look at that One but the trend in the broader crypto Market is clear we're going up and to The right sure it doesn't feel like it From down here in the trenches of rect But just think of Q2 and Q3 summer as a Pit stop on our journey institutions and Trafi Retail investors ran this thing up So hard in q1 the market had to tap out For a minute to catch its breath the Total crypto market cap is currently Around $2 trillion and the report Predicts that it will 5x from here to 10 Trillion doll by 2030 that's Coincidentally the same market cap that The report predicts tokenized assets to Reach by 2032 how much of this asset tokenization Will fall within the bounds of what we Call crypto is a crucial question and we Don't have the answer yet depending on The path taken by Regulators lawmakers And institutional investors digital Assets could bipoc further we'll have to Remain Vigilant about the crypto Negative elements of trafi trying to Take our place with their consciously Non-crypto digital assets and
Distributed Ledger technology on the Other hand crypto now has so much public Infrastructure it'll probably be hard For Enterprise blockchains to keep up With the scale and speed at which we're Innovating the better our infrastructure Is the more asset tokenization is likely To happen within crypto and if rwas as a Crypto narrative plays out the total Crypto market cap could be significantly Higher than 10 trillion dollar by 2030 Of course our layer ones and layer 2os Suffer from centralization and Censorship issues of their own and we Should continue to criticize them for This but by Satoshi they're a lot better Than using using Jamie Diamond's chain Let's hope that the crypto positive Faction represented by Larry thinkink And certain us politicians can direct The coming wave of asset tokenization to Public blockchains Instead right that's all for today folks Let us know what you think of the Digital assets versus crypto dichotomy In the comments below smash the like if You're looking forward to A10 trillion Crypto market cap and don't forget to Subscribe and turn your bell Notifications on so you can keep up with All the latest from the Crypt verse as Always thank you for watching and I'll See you next time this is Guy signing Off
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