The answer is simple: they don't know how
6/20/2022, 02:05 AM
In his annual letter to shareholders, Larry Fink revealed a hint of warming to cryptocurrencies. This line was a remarkable turnround for the chief executive, who once said: “Bitcoin just shows you how much demand for money laundering there is in the world.” It seemed to reflect a broader thaw in attitudes among asset managers towards cryptocurrencies.
But, while smaller players have been quick to serve retail investors’ ravenous demand for crypto funds, major players like BlackRock, which runs the iShares funds empire, have held back — put off by volatility, regulatory worries, and the daunting logistics of running crypto investment products. After Fink sent his letter in March, those worries were then borne out. Crypto prices suffered significant and protracted falls. Bitcoin, the largest token, lost 50 per cent of its value against the dollar between March and the end of last week, and has fallen by more than 70 per cent from its peak in November. In May, investors’ faith in crypto was dealt a further blow after a popular token called Terra collapsed , wiping out investors to the tune of more than $40bn — including many individuals who put their savings into the project.
For critics , these sharp market movements and high-profile blow ups have underscored longstanding concerns that crypto is too volatile to be a suitable fund investment , and that many of its much-hyped projects and innovations lack solid underpinnings . Taimur Hyat , chief investment officer of PGIM Group , explained : “Despite the hype , we find little evidence that cryptocurrencies offer any meaningful opportunities for institutional investors .” However some are less sceptical . Even in May , as Terra ’s collapse rocked the crypto world , investors put $66 . 5mn on average each week into virtual asset investment products according to data from CryptoCompare
But, while smaller players have been quick to serve retail investors’ ravenous demand for crypto funds, major players like BlackRock, which runs the iShares funds empire, have held back — put off by volatility, regulatory worries, and the daunting logistics of running crypto investment products. After Fink sent his letter in March, those worries were then borne out. Crypto prices suffered significant and protracted falls. Bitcoin, the largest token, lost 50 per cent of its value against the dollar between March and the end of last week, and has fallen by more than 70 per cent from its peak in November. In May, investors’ faith in crypto was dealt a further blow after a popular token called Terra collapsed , wiping out investors to the tune of more than $40bn — including many individuals who put their savings into the project.
For critics , these sharp market movements and high-profile blow ups have underscored longstanding concerns that crypto is too volatile to be a suitable fund investment , and that many of its much-hyped projects and innovations lack solid underpinnings . Taimur Hyat , chief investment officer of PGIM Group , explained : “Despite the hype , we find little evidence that cryptocurrencies offer any meaningful opportunities for institutional investors .” However some are less sceptical . Even in May , as Terra ’s collapse rocked the crypto world , investors put $66 . 5mn on average each week into virtual asset investment products according to data from CryptoCompare