According to the head of digital assets and financial markets at Northern Trust, institutional investors have lost their interest for cryptocurrency since 2022, and despite the recent upward trend in the market this year, their view remains consistent.
“Just after March the crypto market went off a cliff… the client interest has definitely gone off the same cliff in terms of institutional interest in in cryptocurrencies” said – Justin Chapman
During the Digital Assets Week conference in San Francisco, Justin Chapman, speaking on CNBC's “Crypto World,” mentioned that institutions have redirected their attention towards the underlying blockchain technology of cryptocurrencies. However, he also emphasized that his firm, Northern Trust, is prepared with the necessary capabilities in case there is a resurgence of client interest in crypto assets.
At the San Francisco conference, leaders of major financial institutions exhibited enthusiasm regarding blockchain technology, particularly its potential to tokenize tangible assets such as gold on behalf of clients.
Bitcoin has experienced a remarkable recovery this year, surging by nearly 75% after suffering a 64% decline in 2022. The year began with trading yet to commence, accompanied by historically low levels of volatility. However, the industry has been overshadowed by a regulatory crackdown in the U.S., which cast a negative light, while the banking crisis has paradoxically contributed to driving up the price of bitcoin. Both factors have reintroduced volatility to the market. Despite the ongoing struggle for bitcoin to surpass the $30,000 mark, investors generally concur that it continues to exhibit a long-term upward trend.
“We’re not focused that much on the asset class because the client isn’t at the moment, So we’re not seeing that appetite to have that within their portfolios. If that changes, as a firm, we can account for those capabilities. But it’s certainly lost its shine from the institutional perspective.” Chapman said
