Institution Interest is Ramping Up in Cryptocurrencies, Hidden in Plain Sight
The host of CNBC’s Crypto Trader, Ran NeuNer says the latest developments in the form of BiGo announcing that it will provide $100 million of insurance coverage for digital assets is a big sign that institutional investors are getting in. Moreover, the University of Michigan's plans to further invest in cryptocurrency is another step in the direction of growth and maturation of the crypto market.
“I think that this story’s been underplayed… For me, this is the biggest story of the week. I think that one of the biggest barriers for entry for institutions is that they don’t understand this asset class, and in particular how to store it. And for them, this unknown increases the perception of how risky an investment in the crypto space is.
Now that we’ve got significant insurance with a credible provider like Lloyd’s, it’s another big hurdle out of the way and opens up the gates for this huge flow of institutional money.”
Crypto security company BitGo is providing $100 million of cover against the loss or theft of keys via Lloyd’ of London. They already cover investments in Bitcoin, Bitcoin Cash, XRP, Ethereum, Zcash, and Dash and recently announced support for Tron that will be coming later this year.
Institutional Interest In Cryptos To Ramp Up Even More
Anthony Pompliano, the co-founder of Morgan Creek Digital agrees with this as he says this will encourage more institutional investors to come into this space.
“This is a huge deal. Obviously, one of the big concerns is that if I put my money into cryptocurrencies or crypto assets and then I lose the keys, they’re destroyed or stolen, I lost all my money. That’s not something the institutional world is really excited about.
Now that there is up to $100 million of insurance per claim, I think you’ll see a little bit more interest because they feel like hey if something does happen around lost, theft or damaged keys, I have this insurance policy that will help me recoup my capital. So I think it’s a big deal, an important step and hopefully will elicit many more institutional investors to come into space.”
Given the fact that Bitcoin futures volume on CME has made its highest record ever, institutions interest is certainly in the space but in order to retain this interest, the crypto space is increasingly working on products. Recently US-headquartered Curv, a digital asset startup raised $6.5 million to launch a cloud-based digital asset wallet. This wallet is for financial institutions that don't use private keys.