Despite the increased demand for digital currencies, especially Bitcoin (BTC) from institutional clients, Fidelity Investment’s boss said several wealth managers are still studying the new asset class.
Mike Durbin said in a Reuters interview that although recent events in the crypto space have given birth to investment firms and advisors who are now getting comfortable with cryptocurrencies, the vast majority are still learning about the tech.
“They [wealth managers] know what they are doing, and more importantly their end investor base also knows what they are doing – but the vast majority are still in the education mode,” Durbin said.
While Bitcoin’s recent feat cannot be overlooked, Durbin noted that cryptocurrencies would be more acceptable if they were seen as alternative investments just like real estate, private equity, and hedge funds.
Durbin added that he believes interest in BTC and other cryptocurrencies among wealth managers will become a reality when there is also a rising interest in alternative investments.
He continued that while several investment firms and advisors are still trying to wrap their heads around cryptocurrencies, it is best to help them understand crypto by describing it as an alternative investment.
Institutional Interest in Bitcoin on the Rise
Following MicroStrategy’s Bitcoin investment, several other institutional players and corporate investors have joined the game. The massive interest contributed tremendously to the growth of BTC, which rose above $61,000 earlier this month.
Bitcoin’s ability to overcome the storm of the coronavirus (COVID-19) pandemic and become the best performing financial instrument in the last year, made it a topic of discussion among financial experts.
Fidelity Investments is among the early mainstream crypto investment firms set up exclusively for institutional clients. The company began its crypto journey in 2018 via its custody service for financial firms and corporations.