Justin Chapman, executive director of American financial services firm Northern Trust, says crypto is 'losing its shine' for institutional investors
Institutional Investors Are Less Interested In Cryptocurrencies
According to the Northern Trust's head of digital assets and financial markets, institutional investors lost interest in crypto after 2022, and despite this year's uptrend, their appetite for it has yet to return.
Justin Chapman told the Digital Assets Week conference in San Francisco that institutions are shifting their focus to the blockchain technology underlying cryptocurrencies, but that interest will return if customers' interest in crypto assets resurfaces.
“Right after March, the crypto market went down a cliff. Customer interest in cryptocurrencies definitely went down the same cliff in terms of institutional interest,” he said.
“There has been absolute silence on the corporate side since 2022,” he continued. “Before that, we were seeing traditional fund managers looking to launch crypto funds, ETPs, the European equivalent of US ETFs.
It got really quiet. Even hedge funds, which are very active in the markets, have certainly reduced their exposure in this area."
Meanwhile, leaders of the largest financial institutions gathered at the conference in San Francisco were energized when it comes to blockchain technology, particularly its potential to help tokenize real-world assets like gold for customers.
Chapman said the "evolution of technology" is moving towards a "better place" in terms of support from market participants.
In particular, the Northern Trust partnered with Standard Chartered in 2020 to launch Zodia, a crypto custodian for institutional investors.
*Not investment advice.