Cryptocurrency AUM stands at $6.4 billion thanks to VCs and hedge funds


Clock ticking for banks on fintech disruption: Morgan Stanley

The cryptocurrency assets under management have increased from around $680 million in January 2017 to almost $7 billion in recent months, shows a research by Morgan Stanley. The boom of cryptocurrency assets under management has soared to such high levels mainly because of heavy support and investments from venture capital firms, private equity and hedge funds.

The Morgan Stanley Research shows that the number of cryptocurrency funds crated prior to 2014 was 107, and now, in 2018, the number is 220. 2014 saw 31 crypto funds, 2015 – 32 and 2016 – 45. Institutional investors are the major reason why these AUMs have skyrocketed.

The most common type of institutional investor that manages cryptocurrency assets are hedge funds (48%), together with venture capital (48%) and private equity (3%). The number one location for cryptocurrency funds’ booms is the United States (50%) and China, along with Hong Kong (9%) and the United Kingdom (6%).

Morgan Stanley also reported that the value of cryptocurrency assets under management can be even higher, but three major obstacles prevent institutional clients from creating even more value in the market.

The first one is the regulatory aspect of cryptocurrencies, or more specifically, the lack of it. Asset managers are also held by the lack of custodian solutions to hold digital coins and the private keys. And the third obstacle is the general lack of larger asset managers and financial institutions that are actively involved in the market. If a major financial player or an asset manager comes in the cryptocurrency game, then that signals confidence in other smaller players, as well.

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Cryptocurrency AUM stands at $6.4 billion thanks to VCs and hedge funds

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