Blockchain has announced a new service targeting institutional investors. The move comes in light of growing interest in endowments, hedge, pension and mutual funds in cryptocurrencies.
The platform, called Blockchain Principal Strategies, will offer institutional investors customized access to research and markets. Investors will be provided with an over-the-counter trading desk,which will operate as ‘matchmaker’ and direct counterparty to clients, executing trades efficiently and managing risk. Clients will also be offered an opportunity to make direct equity investments in promising startups as well as managed investment offerings, including access to vetted early stage token offerings.
“…we will also offer educational and networking opportunities with hopes of creating a broader, well-informed community around digital currencies moving forward,” said Breanne Madigan, Institutional Sales and Strategy head at Blockchain.
The new Blockchain product builds on the momentum of the blockchain technology the past few months. Research conducted by Willis Towers Watson shows that mutual funds, insurance funds, pension funds, endowments and foundations, and sovereign wealth funds encompass approximately $131 trillion of the world’s wealth.
According to analysts, the entry of large institutional investors in the cryptocurrency market will likely legitimize digital assets in the public perception, and spur significant growth.
“Even a small dollar amount is legitimizing. If that happens, every family office says, ‘Oh, Yale’s in. That gives us the excuse.’” says Ari Paul, chief investment officer of BlockTower Capital, a cryptocurrency investment firm. Paul is also a former University of Chicago portfolio manager.
While institutional investors are showing increasing interest in cryptocurrencies, lack of regulations is keeping their funding away from the crypto market; once regulations are in place, the crypto marketplace expects a large influx of institutional investments.