State Street: Investors are unfazed by the crypto winter

• State Street is the fund administrator of the Cosmos Purpose Bitcoin Access ETF launched in May.
• The bank’s crypto unit has continued to see client interest even amid the crypto downturn.

Institutional investors are not sweating on continuing crypto winter, says global banking giant State Street.

Even as the crypto industry navigates the unforgiving downturn that characterised the 2022 market, the US lender says investors are largely undeterred – indeed pointing to unrelenting interest in cryptocurrency and the underlying blockchain technology.

Institutional clients continue to eye crypto as an asset class

According to Irfan Ahmad, State Street Digital’s crypto lead for Asia Pacific, summer’s events have done very little to investor appetite for digital assets. While the period was generally quiet as the analyst notes, the massive volatility that swung bitcoin to under $20k hasn’t really swiped sentiment.

Ahmad told the Sydney Morning Herald that State Street’s crypto unit continued to see institutional clients make moves, with the June-July madness dotted with increasing bets on crypto. He says undeterred clients kept “placing strategic bets on the asset class itself.”

In his view, there is one “takeaway” from all these moves: “I think there is a belief that the asset class is here to stay,” he noted. Given this scenario, State Street Digital as an asset servicer believes it’s the right thing to offer customers the services that align with their investment ambitions.

Among the moves is on product launches or partnerships that support certain blockchain projects, he noted, adding that State Street is looking to add to its crypto products in the region. Already, the banking giant is linked to the first ever physically backed Bitcoin exchange traded fund (ETF) in Australia.

This is because the bank is the fund administrator of the Cosmos Purpose Bitcoin Access ETF, a product that launched in May 2022 on Cboe Australia.

MicroStrategy to buy more Bitcoin

On Friday last week, it was revealed that MicroStrategy, the world’s largest corporate holder of Bitcoin (BTC), was looking to sell its stock and use the funds to buy the cryptocurrency.  

Indeed, the software intelligence company filed with the US Securities and Exchange Commission (SEC) for a possible sale of $500 million worth of its Class A shares.

MicroStrategy’s move is somehow indicative of the sentiment across institutional buyers, most of whom hold a long term bullish view of crypto and blockchain.