VP of $1,530,000,000,000 Institutional investors might benefit from Ethereum staking, says asset manager
A top executive at the $1.5 trillion asset management behemoth Franklin Templeton believes that the Ethereum (ETH) staking yield has tremendous prospects for institutions examining the crypto markets.
In a recent interview on Real Vision with Raoul Pal, he asks Sandy Kaul, senior vice president of Franklin Templeton, whether Ethereum staking may drive institutional adoption.
In response, Kaul says, The asset management specialist compares the growth of the crypto sector to the mid-2000s hedge fund industry when institutions jumped on large market discounts to establish themselves and seize control.
“What transpired in the hedge fund sector before and after 2008 is particularly relevant to our discussion. We had about $2 trillion in assets come in during a three-year period, indicating a significant flood of funds, which curiously brought the industry’s total assets close to $3 trillion, which is roughly where the digital sector was before the previous crash.”
Then, a genuine turnover of the underlying investment base was seen. And what we are now seeing and picking up in the digital asset arena is the same turnover. We are increasingly hearing and seeing institutions replace the retail money that is being withdrawn, and institutional money is beginning to account for an ever-increasing proportion of digital asset ownership.
Institutions are institutional investors. They wait for this kind of wipeout to construct positions, and they will wait for the market to reverse direction. To be clear, it is typically the most market-leading institutions that are looking to be very creative with their portfolios and who have shifted to a factor-driven model after realizing that the digital asset space is bringing a whole new set of “crowd factors” that they’ve never had access to before.
According to Kaul, the second wave of institutional adoption would likely follow during the subsequent bull market, when institutions see their rivals benefitting.
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