State Street sees institutional investors don’t worry about the crypto-winter

    15 Sep 2022

    Investment management giant State Street says institutional clients are not deterred from investing in crypto assets despite price declines. “There is a belief that the asset class is here to stay,” the firm’s executive noted. State Street had expanded its crypto service earlier, citing soaring demand from traditional funds.

    The Sydney Morning Herald reported that the leading investment management firm State Street sees unwaning institutional demand for cryptocurrency despite the market downturn.

    State Street Digital’s product lead for the Asia-Pacific region Irfan Ahmad said the firm’s institutional clients are still keen on crypto and its underlying technology. 

    “During the course of the June, July period where things were really hotting up in terms of activity, we saw institutional clients not necessarily double down, but they weren’t really deterred from placing strategic bets on the asset class itself,” he said, underlining: “The takeaway from that is, I think, there is a belief that the asset class is here to stay.”

    Ahmad noted that a number of major investment firms, such as Goldman Sachs, have begun offering crypto products and are likely to make further moves into the crypto space. In April, Goldman Sachs offered its first Bitcoin-backed loan. Also, the world’s largest asset manager, Blackrock, launched a spot Bitcoin private trust in August. 

    “Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients,” Ahmad said, adding: “Certainly, our clients, they’ve been speaking to us more pragmatically about how they might be able to launch products, or what our capabilities may be in the future to help them support the launch of those products.”

    Last July, State Street announced the expansion of its crypto service, citing soaring demand from traditional funds. Its digital arm, State Street Digital, provides solutions for a range of digital assets, including cryptocurrencies, stablecoins, digital cash, and central bank digital currencies (CBDCs).

    State Street operates in more than 100 geographic markets globally and employs approximately 40,000 worldwide. As of June 30, the financial services giant had $38.2 trillion in assets under custody and administration and $3.5 trillion in assets under management.

    Meanwhile, software development firm MicroStrategy revealed its plans to sell up to $500 million of stock to fund more purchases of BTC. The deal is a sign firm’s exec Michael Saylor isn’t abandoning his bold plan to turn his company into a Bitcoin proxy.

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