Financial advisers lead institutional push for adoption of cryptography

Financial advisers lead institutional push for adoption of cryptography

Edouard Hindi, co-founder and chief investment officer of Tyr Capital, a United Kingdom-based cryptocurrency hedge fund manager, said financial advisers have increased their allocation of digital assets, especially Bitcoin, over the last six months. The shift has also been observed at private banks, which have gone from seeking education on cryptocurrency to investing directly with Tyr Capital Arbitrage. Sonnenshein also noted that financial advisers are among the investors who invest in Grayscale’s family of funds, whose combined assets now exceed $46 billion. “Bitcoin remains the most popular digital currency, though we also see growing interest in Ethereum and other digital assets as well,” he said. He explained that “the bulk of the interest we are seeing remains concentrated on the directionless high risk/reward attributes of funds like Tyr Capital Arbitrage and directional exposure to Bitcoin.”

While this may not drive immediate action, cryptocurrencies have certainly become a consideration for advisers, he explained. “Ultimately, financial advisers are responding to client demand,” he said, adding: In a follow-up interview with Cointelegraph, Sonnenshein explained that “curiosity and demand from clients are driving financial adviser interest in crypto.” His conclusion stems from a preliminary survey commissioned by Grayscale showing that “more than half of advisers are receiving questions from their clients about cryptocurrencies.”

“Crypto generally and Bitcoin specifically has been well covered in the press, with major corporations and financial institutions making Bitcoin part of their balance sheets, and notable entrepreneurs and investors voicing their investments in Bitcoin. If you’re a knowledgeable investor, you’re going to want to know more about this asset class, and if you have a financial adviser, you’re going to ask them about it.” ‘Curiosity and demand’

“Now that custody and regulatory barriers are slowly dropping, what could still be hindering a broader adoption of crypto by financial advisors is the perception that ‘fiduciary standards’ remain a challenge in openly advocating for the asset class to be included in customers’ portfolios.” Jeffrey Wang, head of Americas for Amber Group, a crypto-finance startup founded by former Morgan Stanley, Goldman Sachs and Bloomberg professionals, believes independent advisers have a lot more freedom to diversify into crypto than the major banks. Now, it’s considered career-ending not to have any exposure to digital assets. The final domino to fall, Hindi believes, could be fiduciary standards:

Bitcoin’s newfound legitimacy within the institutional ranks has eliminated much of the so-called “career risk” involved with investing in the digital asset market. As Hindi noted, one year ago finance professionals were thought to be taking a “career-ending risk” for investing in crypto. Crypto exposure no longer ‘career-ending’

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