- Institutional interest in Bitcoin continues to rise.
- Corporate treasury purchases of Bitcoin and Ether have continued despite a soft patch in markets.
- US regulators are making crypto-friendly changes, while Chinese regulators are advising caution.
Bitcoin resilience amid institutional interest
Crypto markets had entered a soft patch, with Bitcoin trading sideways and Ether seeing a sharp dip. After seeing record prices in August, sentiment towards digital assets had softened, led by altcoins and crypto related equities. Bitcoin resilience was noteworthy and reflects its status as the most established digital asset designed as a store of value.
Institutional interest in digital asset markets is still rising. A top fund manager at a multi-trillion dollar US asset management firm opined that Bitcoin may emerge as a store of value that replaces gold in a Sep WSJ report. The firm also revealed its USD500m investment in Strategy first made in 2021 to gain investment exposure to Bitcoin, and another new investment in a Japanese Bitcoin treasury company this year. Ray Dalio, a renowned hedge fund manager, said on a recent podcast that investors should allocate to gold and Bitcoin, and that Bitcoin is being perceived by many as an “alternative money”. Harvard, Brown, and UChicago endowment funds have also reported Bitcoin investments. In addition, corporate treasury purchases of cryptos continued in Sep despite softening sentiment. Two Bitcoin treasury companies purchased around USD500mn of BTC combined, while a large Ether treasury company reportedly acquired around USD2.3bn of ETH.
Regulatory oversight over cryptos across US and China is also changing in response to innovation and new developments. In the US, the SEC has cleared exchanges to use generic listing standards for digital asset products, creating a faster path to list spot crypto ETFs. At the same time, the SEC remains vigilant on market integrity, having started investigations into information leaks ahead of digital asset treasury companies’ announcements. In China, regulators had reportedly directed mainland tech and financial firms to reduce crypto activity related to onshore RWA and stablecoins to manage risks.
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