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Institutional investors still eye crypto despite the FTX collapse

December 7, 2022 Coin Telegraph

Coin Telegraph

Data sent by crypto exchange Bitstamp shows that institutional registrations in the trading platform increased by 57% in November.

The negative effects caused by the FTX debacle have put the crypto space in an unfavorable light. However, institutional investors continued to show interest in the industry even at the height of the FTX controversy.

According to crypto exchange Bitstamp, compared to their data in October, institutional registrations within its digital asset trading platform is up by 57% in November, when the topic of the FTX collapse frequented news headlines. The exchange also told Cointelegraph that its total revenue is up by 45% in the same period, with revenue coming from institutions up by 34% and from retail traders up by 72%.

The exchange also highlighted that compared to October, active global retail users in November also increased by 43%, with United States-based users up by 18%. This suggests that even with FTX being a hot topic in the space, more crypto investors were actively trading within the exchange.

On-chain analyst Willy Woo also commented on the issue of traditional finance investors eyeing the space. In a tweet, Woo argued that while the FTX collapse looks like it sets the industry back, traditional finance capital allocators are viewing the situation as an opportunity to come in. "They see Bitcoin and crypto is here to stay and it’s now been de-risked," he wrote.

On Dec. 6, financial services firm Goldman Sachs expressed its intent to purchase or invest in crypto companies. Goldman Sachs executive Mathew McDermott recently mentioned that the firm is already doing due diligence and is seeing opportunities while valuations are low. The executive also noted that while FTX became a prominent example within the industry, the underlying technology behind the space still continues to perform.

Meanwhile, SEBA Bank aims to speed up institutional adoption through a partnership with HashKey Group. On Dec. 5, the firm announced that it will be working with HashKey to accelerate digital asset adoption within institutions in Hong Kong and Switzerland.

On Nov. 4, a survey released by Fidelity Digital Assets showed why institutions are accumulating crypto in 2022. In a previous Cointelegraph interview, Chris Kuiper, the Head of Research at Fidelity Digital Assets, mentioned that there is an increase in institutions holding crypto while 78% of respondents are planning to enter the space in the future.

Institutions ‘moving very, very fast’ into Crypto: Coinbase exec

October 19, 2022 Coin Telegraph

Coin Telegraph

D’Agostino also said the recent battles between the SEC and CFTC is a good thing for crypto because it indicates that it will be a “vitally important piece of market structure” moving forward.

Institutional adoption of digital assets is “moving very, very fast,” and much faster than the rate nascent industries ordinarily develop at, says Coinbase Senior Advisor John D’Agostino.

In an Oct. 18 interview with SALT moderated by Anthony Scaramucci, D’Agostino said that new asset classes often take time to develop, as “institutional inertia is a very real thing” and “there’s a lot of switching costs associated with adding new assets” but that this hasn’t been the case with crypto.

“So for me, for someone who spent 15 years trying to get commodities to be mainstream, it’s actually moving fast. But I do understand why somebody in the heat of the moment feels it’s glacial. But for institutions I think it’s moving very, very fast.”

As for what may have slowed institutional adoption, D’Agostino said that U.S. regulators have been “complacent” to the point that it harmed “the growth of the technology.”

But interestingly, D’Agostino sees the “bifurcated regulatory regime” between the U.S. Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) “as a good thing” because “nobody fights over something that is going to go away.”

“The fact that crypto is being used as a bargaining chip by the heads of regulatory agencies [and] the fact that these public announcements are being made to push a positioning around which regulatory agency will be in control is an indication that this is a vitally important piece of market structure.”

D'Agostino was adamant that a crypto-related Exchange-Traded Fund (ETF) will eventually be approved, despite the SEC's ongoing rejections.

“I think that’s going to change. Despite the delay, an ETF is inevitable. I can’t tell you when it’s going to happen. But I know at some point it’s going to happen.”

Co-founder and CEO of Singaporean crypto exchange Coinhako Yusho Liu recently told Cointelegraph that he expected institutional interest to keep growing as the industry matures.

"We believe institutional flows into the market will continue to grow and serve as a crucial driver for future crypto innovation and adoption," he said.

institutional adoption