Crypto in 2019: What to Expect from Institutional Investors
Updated: Jun 25, 2019
Banks and big financial institutions have revealed themselves to be highly curious about cryptocurrencies and blockchains in recent years, but few have actually taken the step of developing or launching a usable blockchain-based platform. Indeed, last year saw the likes of Barclays and the Reserve Bank of India shelve cryptocurrency-related projects, despite their initial interest in exploring crypto-related opportunities.
As for 2019, the current year won't perhaps bring a wave of banks attempting to launch their own cryptocurrencies or crypto-trading platforms. However, there might be plenty of interest from big institutions in blockchain technology more broadly, particularly as it relates to cross-border payments and the tracking of transactions and orders.
Jim Sinegal, a senior investment analyst at Fragasso Financial Advisors, tells Cryptonews.com that, in 2019, banks and financial institutions will look increasingly less at specific cryptocurrencies, and increasingly more at blockchain-based platforms.
"The potential applications for blockchain technology are far wider than those for bitcoin, and blockchain technology doesn't come with the regulatory baggage that Bitcoin does, so most mainstream financial activity is still going to be focused on blockchain," he says.
"Cross-border business-to-business payments are still slow and costly, so a public ledger makes a lot of sense in these areas,” he adds. “There's also overlap between supply chain and financial activities – tracking global inventories, orders, and related payables, receivables, and financing, for instance – so there's a lot of room for broad blockchain initiatives between banks and traditional firms."
Indeed, Sinegal's prediction is substantiated by the final months of 2018, which saw Goldman Sachs (among others) invest in cross-border payments platform Veem, which saw US bank PNC join the Ripple Network, and which saw the UAE and Saudi Arabia begin collaborating on a blockchain-based system for international payments.
It's also substantiated by other commentators. Tyler Welmans, Deloitte UK's blockchain lead, tells Cryptonews.com that he expects continued growth in corporate investment in crypto-related platforms and services, with the recent slump in the market arguably making crypto as a whole more attractive to certain investors.
"With respect to public networks and cryptocurrencies, there are few signs banks are investing directly in cryptocurrencies, although plenty of niche investment funds are,” he says. “However, we continue to see strong growth in the development of cryptocurrency-linked products and services, such as exchange trading, futures and custody services."
"While we don’t anticipate significant direct investment from banks into cryptocurrency in 2019, price declines through much of 2018 have moved the broader crypto-asset class into attractive territory for would-be institutional investors.
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