Crypto Market Recovery Will Take Time Claims Former Morgan Stanley Investment Specialist
Crypto investors around the world were hoping that the bear market of 2018 will remain in 2018 and that the new year will bring crypto markets to a more prosperous path once again. While this is still possible, Morgan Stanley's former Managing Director, Patrick Springer, believes that it will take some time before the market recovers.
While working at Morgan Stanley, Springer was helping institutional investors with making better decisions in regards to their investment in global equity markets. Now, however, he is an advisor at Polybird Exchange, delving deep into the crypto market and using his experience to provide expert opinions on when and if institutions will decide to approach the crypto space.
Institutional Investors Are Waiting For The Right Conditions
According to Springer, there are many Wall Street companies that will not approach crypto and blockchain until the conditions are right. This includes numerous factors, starting with an increase in demand from institutions' own clients. As of yet, that demand has not been determined, and the damage that the crypto market suffered in 2018 is just another reason for institutions to stay away. Another big issue that they have with the digital money markets is the lack of regulations. All of these issues can be resolved, however, but it will take a certain amount of time, and the market is still not there yet.
As for Springer himself, he believes that blockchain-based assets, particularly securities, are here to stay, which is why he chose to make a career switch and enter the crypto space himself. For now, he says, there is a lot of confidence when it comes to stablecoins. He believes that securities will attract the same amount of attention and trust in the future.
Asset tokenization is something that the crypto space has been preparing itself for, and the process will create numerous new opportunities in different parts of asset markets. Springer also believes that asset tokenization will attract institutional investors, as it represents an easier way of sharing ownership. He also decided to become an advisor to the Polybird Exchange as the company sees the value and opportunities in a market that many others have yet to understand. This project can bring numerous benefits to everyone, from individual investors to large corporations.
Why Is Asset Tokenization Important?
According to Springer, blockchain technology is a large threat to the system of bank transfer fees and consumer credit payments that are in use currently. Even so, the real game changer will come when asset tokenization starts. Not only will numerous different types of real estate investments become available to more investors, but more financing channels will emerge for real estate developers.
Tokenization of assets is a process that will make every asset of value digitally encrypted, which will allow investors to share them through the use of smart contracts, and significantly reduce the market frictions. Meanwhile, it will also list them on a global marketplace, which will allow more investors to evaluate them and transact more seamlessly. As a result, Springer expects that the economy will become more efficient.
This is necessary, as the current changes in the economy may lead to further difficulties. One example of this is the fact that the US stock exchange already has only half of the number of publicly listed companies when compared to the situation in the year 2000. Some have even gone as far as to say that IPOs are irreversibly gone. Springer believes that the current capital market cannot address the needs of the economy and that digitizing assets can be a solution to this problem.
While the tokenization of publicly traded firms sounds like the right move to make in theory, many are wondering whether this can be achieved in reality? Can people own fractions of assets by buying tokens instead of having to own shares and stocks?
According to Springer, it is entirely feasible. However, it will require fully-developed and well-thought-out use case in order to work properly. A lot of it depends on the use case, but under the right conditions, he remains certain that the process will be beneficial.
As mentioned, Springer also recognizes that cryptocurrencies have a long way to go to receive proper regulations and achieve stability in the US. However, he remains optimistic regarding the future, whether cryptos achieve their victory in 2019 or later down the line.
Furthermore, he stated that the damage that the crypto space has suffered goes beyond just the market crash and drop in value. ICOs are also a big part of the problem, as they came to an unprepared market, and damaged its reputation. As a result, those who participate in the crypto space have suffered negative effects as well.
However, the digital assets market can become more transparent and efficient, which will benefit the economy, and gain the support of US regulators. While it will take time for this to happen, Springer believes that this is an inevitable future.