Cambridge Associates, a consultant for pensions and endowments has advised institutional investors to take the chance and invest in cryptocurrencies. In this case, these investors can learn about the space before finally venturing in, according to Bloomberg’s report on February 18.
Cambridge Associates Encourages Institutional Investors
Cambridge Associates has encouraged large institutions which are known to control over $300 billion, to take the chance and invest in cryptocurrencies. The first step is by taking “a considerable amount of time learning about the space,”. The firm also suggests surveying the different ways investments can be made either through venture capital fund or purchasing tokens directly from cryptocurrency exchanges.
Cambridge Analysts in a note to Bloomberg stated that:
Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term. Though these investments entail a high degree of risk, some may very well upend the digital world.’
Institutional Investors, One of the Keys to Crypto Massive Adoption
Institutional investors are believed to be one of the keys that will encourage the massive adoption of bitcoin and altcoins. There are expectations that they can bring more credibility to the market. By their investments, it shows their confidence in the market. There is also the prospect of more money being pumped into the market through their investments.
Nonetheless, large institutions are known to be reluctant when it comes to investing in virtual currencies. The reason has usually been attributed to the way these assets are used to facilitate crimes such as money laundering. The unregulated and volatile nature of the market has also made them steer away from it. Bitcoin, for instance, has devalued by over 80 percent since its bubble in December 2017.
First U.S. Pension Funds Invests in Venture-Capital Fund
That aside, BTCNN on February 14 reported the investment of two pension funds in Virginia in a venture-capital fund for blockchain and cryptocurrency. The fund was offered by Morgan Creek Digital who revealed that the duo had made a major contribution to the $40 million that was raised.
On February 1, Fidelity investment, a financial services company informed that their cryptocurrency custody service would be launched in March. They also added that the final testing of the platform is ongoing. It is believed that the launch of this platform by this reputable company will attract more investors into the market, especially those who once had cold feet.