The past few months have welcomed several notable institutions and investors into the digital asset community. From Paul Tudor Jones to Square, PayPal and JPMorgan, the next wave of acceptance is reaching top tier asset managers.
This week, both Guggenheim and AllianceBernstein released statements declaring digital assets a legitimate asset class, with Guggenheim announcing a possible allocation of up to 10% of their $5.3 billion Macro Opportunities Fund into the Grayscale Bitcoin Trust (GBTC).
As one of the largest asset managers on Wall Street, Guggenheim is taking a leading role in recognizing the true use cases and profitability behind a decentralized financial infrastructure, and their impending asset allocation to GBTC is validation that this asset class is not going anywhere.
As the world becomes increasingly digitized and the pace of innovation is more cutthroat than ever, Guggenheim’s validation of Bitcoin is indicative of their foresight into the future of asset management. With their vision of a digital asset-backed financial future, Guggenheim is living up to their fiduciary commitment to drive future returns for their clients by allocating up to $530mm into the asset class of the future.
Alongside Guggenheim in their recognition of cryptocurrencies as an asset class is Wall Street giant AllianceBerstein. Earlier this week, Inigo Fraser Jenkins, Co-Head of Bernstein Research’s Portfolio Strategy team released a statement claiming that digital assets “do have a place in asset allocation.”
Coming back on his 2018 remarks that digital assets do not present a convincing use case because their historic volatility ruled them out as a means of transaction, Fraser Jenkins’ recent statement is credited to Bitcoin’s lower price volatility and therefore strengthened foundation as a store of value asset. On Bitcoin’s viability as a store of value, Fraser Jenkins told CoinDesk that Bitcoin’s downward trend of price volatility “makes it more attractive both as a store of value and as a medium of exchange.”
There is no denying that Bitcoin is earning the respect of Wall Street. Massive allocations from MicroStrategy, Square, and legendary investors like Paul Tudor Jones along with crypto integrations from PayPal and JPMorgan are delivering Bitcoin on a gold platter to the global investment community. The momentum from the past few months has made one thing clear: Bitcoin is not going anywhere, and as Bitcoin is here to stay, regulation will soon follow to project the world into a future of universal digital asset adoption.
By Liam McDonald
itBit exchange, the digital asset exchange that provides liquidity for PayPal, has seen a tremendous upswing in trading volume in the three weeks since PayPal announced the integration of digital asset payments on their platform. Owned by Paxos, PayPal’s broker-dealer, itBit has seen close to double its record trading volume since PayPal’s announcement, indicating that the PayPal digital currency platform has a high utility among its users. Below, see itBit’s recent growth in trading volume.
Noting the utility that PayPal is seeing within crypto payments, this trend’s biggest takeaway is that PayPal is finally giving crypto a platform to be used for what it was created to be: a permissionless peer-to-peer transaction network. While Coinbase and other digital asset custodians have enabled users to exchange freely amongst each other, PayPal is mainstreaming crypto’s original purpose as a currency, restoring validation to crypto as a “cryptocurrency.”
While PayPal’s efforts to mainstream the use cases of digital assets is driving incredible trading volume on exchanges, their adoption is just icing on the cake for the crypto ecosystem. As Bitcoin nears its previous all-time high, there is no stopping the increasing pace of innovation and adoption of blockchain technology as a pathway to financial freedom.
By Liam McDonald
On Oct. 27th, JPMorgan announced the launch of their long-awaited “JPM Coin,” along with Onyx, their new branch for digital asset operations and custody services.
JPMorgan’s move, while contradicting to CEO Jamie Dimon’s 2017 claim that Bitcoin is a “fraud,” strategically places the bank along the cutting edge of financial technology, giving JP Morgan a strong positioning as the new age of decentralized financial services arises.
The launch of the JPM Coin along with Onyx is more than just JPMorgan jumping on the blockchain bandwagon. Rather, the launch of these services is indicative of the bank’s belief in the ever-expanding potential and use cases of blockchain technology to be a profitable and cost efficient approach to the future of financial services.
Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, stated in an interview last week about blockchain’s profitability, “We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business.”
Similarly, the bank plans on utilizing the permissionless efficiency of blockchain technology as it looks to build out cost effective solutions to risky interbank transfers and cross-border payments. Blockchain technology, as we all know, is no stranger to near immediate global value transfers with just the tap of a finger. To assist in their effort to rebuild the traditional flow of money, JPMorgan has launched Liink, a P2P network built on the Onyx blockchain platform to automatically validate payments and assist in quick, secure transactions that remove the risk of third party interference and lag time.
As the crypto ecosystem enters into the era of widespread adoption, banks must future-proof themselves by recognizing trends in financial technology and embracing fintech momentum. In this day and age, it is imperative that banks alter their outdated approach to financial services and adapt a new, more efficient approach to banking: harnessing the power of blockchain technology. As JPMorgan pioneers Wall Street’s blockchain presence, financial services companies will soon be forced to follow suit in order to stay afloat in an increasingly decentralized world.
By Liam McDonald