Request WisdomTreeCrypto-backed funds have remained “consistently strong” during the price crash this year, with professional fund managers in Europe among the top players allocating to the space, this asset management firm and provider of technology has said. exchange-traded funds (ETFs).
Will Peck, Head of Digital Assets at WisdomTree, said Cryptonews.com in an interview on Tuesday that,
“We have seen the demand [for crypto-backed ETFs] be strong enough constantly […] This shows that asset allocators are considering [crypto] like any other asset, trying to build portfolios and allocating to them.
Peck explained that investments in the digital asset space are the result of asset managers realizing that crypto represents an uncorrelated asset class that has the potential for “outsized returns.”
Europe — which is WisdomTree’s main area of focus for ETFs — is a “quite institutional market” with many active multi-asset managers and family offices, and “crypto caters to their needs,” Peck said. . With stock and bond prices plummeting, crypto as an asset class “certainly has appeal,” he added.
“I think that’s very encouraging in terms of adoption in the institutional space – you see people not just trading momentum in the same way – retail FOMO [fear or missing out] trading – but people just say ‘hey, that makes sense’ – whether it’s 2, 5, 10% of my portfolio – I’m going to continue to allocate based on that,” WisdomTree’s head of digital assets said.
WisdomTree’s crypto-asset funds saw inflows of $2 million in April and $12 million in March this year. That compares to a net outflow of $25 million in April and an inflow of $30 million in March of last year, according to information released by the asset manager.
In addition, Peck said the company intentionally chose not to list ETFs backed by crypto futures in the United States due to the contango effect and the “serious performance degradation” it causes for Investors. Instead, the company is focusing on Europe, where spot crypto ETFs have been approved in several countries, he said.
Asked how the regulatory situation might change in the US, WisdomTree’s head of crypto said he doesn’t expect more regulatory clarity to happen “from Congress anytime soon” , but admitted he had been “encouraged by the way policy makers talk about [crypto].”
Biden’s executive order on crypto was “generally encouraging,” Peck added.
There were concerns that the executive order would introduce tough new regulations on the digital asset space, but instead it largely focused on consumer protection and the need to “strengthen U.S. leadership in the global financial system.
“I don’t expect any kind of negative surprises – at least in the United States,” Peck said, before adding that “people should be encouraged by the ongoing regulatory dynamics.”
Peck concluded that,
“There’s going to be continued innovation – maybe less coins going up and down, but for those of us who are in it for the long haul, I’m not sure that’s a bad thing.”
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