- John Haar is the CEO of the Swan Bitcoin crypto services platform.
- Discusses the concept of "safe money" and Bitcoin's value-based support for traditional finance.
- In an extended bear market, the Wall Street giants continue to announce crypto partnerships.
On Tuesday, the oldest US bank, BNY Mellon, announced that its customers will soon have cryptocurrencies. In September, private equity giant KKR provided part of its health fund on the Tier 1 blockchain to Avalanche. The news series is closely related to the partnership between $ 10 trillion asset manager BlackRock and Coinbase.
"Our institutional clients are increasingly interested in accessing digital asset markets and are focused on how to effectively manage the operational lifecycle of these assets," said Joseph Chalom, global director of strategic partnerships for ecosystems. In an August BlackRock blog post. .
These moves are significant milestones for traditional financial institutions as Wall Street begins to dive deeper into the emerging and often volatile world of cryptocurrencies.
John Haar, CEO of the digital asset services platform Swan Bitcoin, previously spent 12 years at Goldman Sachs. He says bitcoin is the biggest contender to gain a foothold in traditional finance and attract institutional interest.
"As for what they will really solve in terms of business, I agree that Bitcoin has taken the lion's share," Haar told Insider.
Investors have also seen the first wave of institutional interest in cryptocurrency through Bitcoin.
Morgan Stanley became the first major US bank to offer bitcoin access to some wealthy customers. Meanwhile, Paul Tudor Jones, one of the most successful hedge fund managers, said the cryptocurrency is in his portfolio. MicroStrategy, a public software company founded by Michael Saylor, acquired $ 425 million worth of bitcoin in August 2020.
"The next logical step for Bitcoin is to replace gold as a non-sovereign store of value," Sailor said at MarketWatch's Best New Money Ideas festival.
First, the value of bitcoin, according to Haar, is supported by the concept of "safe money", a currency that is not subject to sudden depreciation or revaluation. The token is "rare", "censorship-proof" and store of value because it has a fixed supply of 21 million and does not have a centralized governing body. (Basically, there is no Federal Reserve Bitcoin where you could pump more tokens into a bear market.)
“I think bitcoin is easier to sell, but I think we're still at a very early stage of how this is possible. I think that if the institutions enter this space, it will be easier for them to defend themselves ”. and Bitcoin investment committees ".
He also says that institutions have seen bitcoin outperform the bear market better than most others. According to Friday Messari, altcoins like Solana and Avalanche are down 90% from their all-time highs, respectively.
As the Federal Reserve continues to raise interest rates to fight nearly 40 years of high inflation, the price of bitcoin also continues to decline. Both Ethereum and Bitcoin are down more than 70% from their all-time highs on Friday, according to Messari, with the industry's total market capitalization also down two-thirds.
"I know that the price of bitcoin has dropped quite drastically in 2022, but there are some crypto tokens that have literally gone to zero," he said. "Relatively speaking, I think it can be argued that bitcoin is a safer and more prudent investment than these things."
Elsewhere, others have argued that Ethereum will be the next big "step" for institutional adoption in cryptocurrencies. This is partly due to Merge, a smart contract network upgrade that has reduced energy consumption by more than 99% and reduced emissions.
“Will there be any changes? Another major macroeconomic rally in risky assets will be needed to confirm Ethereum's institutional preference, "Joshua Lim, former Galaxy Digital trade manager, previously told Insider.
Lim added: “We have previously seen a massive influx of funds into Ethereum as a funding resource. In the 2017 cycle, retail investors flocked to Ethereum as a stepping stone to ICOs. In this cycle, institutional investors have recognized Ethereum as the basis for most DeFi and stablecoins. asset, then new capital was paid into the asset class via ethereum, not bitcoin.