Is crypto investing the future of banking? Not in the short term, says fintech executive Nikolay Storonsky, the CEO of London-based startup Revolut, which recently began offering cryptocurrency trading.
Storonsky said he had seen “no interest” so far from mainstream institutional investors — despite the fact that Wall Street powerhouses Goldman Sachs and Fidelity are building financial frameworks to enable institutional investors and retail traders to invest in the crypto market.
“There is no interest from big institutional investors so far,” Storonsky said at Web Summit 2018 in Lisbon, as reported by Bloomberg. “Unless these big institutional investors and hedge funds move heavily into the crypto world, I just don’t think banks will move because they simply try to make money from their clients.”
Storonsky expects the sentiment to improve in 2019, but predicts that major banks will stay on the sidelines for some time.
“Fintech will be very big in crypto for the foreseeable future,’’ he said. ‘’I just don’t think banks will catch up.’’
Despite his sobering remarks, Storonsky is a cryptocurrency enthusiast who underscored that bitcoin is “definitely not a fraud.”
In April 2018, Revolut raised $250 million, bringing its valuation to a stunning $1.7 billion. The app-based banking alternative provides a debit card that enables users to spend money in 150 currencies with no fees at a real-time exchange rate.
Nikolay Storonsky’s bearish near-term outlook mirrored that of Larry Fink, the CEO of BlackRock — the world’s largest asset manager.
Fink said BlackRock — which has $6.4 trillion in assets under management — will not launch a bitcoin ETF until the cryptocurrency industry becomes “legitimate.” And because the market is still in its infancy, Fink does not believe this will happen anytime soon.
“It will ultimately have to be backed by a government,” Fink explained. “I don’t sense that any government will allow that unless they have a sense of where that money’s going.”
In stark contrast to the skepticism expressed by Fink and Storonsky, crypto evangelist Mike Novogratz says the future of digital assets is unlimited and poised to skyrocket over the next few months.
A major impetus for this boom will be institutional investors, said Novogratz, the CEO of crypto investment firm Galaxy Digital Capital Management.
Novogratz predicts that bitcoin will shake off its 2018 slump and rocket to $20,000 in 2019 — fueled by a spike in institutional investments.
Novogratz, a former hedge fund manager and Goldman Sachs partner, says traditional finance will hop on the crypto bandwagon as bitcoin gains mainstream traction, as CCN.com has reported.
“Three to six months from now, there will be an ‘all-clear’ sign for people — big institutions and pension [funds] — to start investing,” Novogratz said. “There’s going to be a case of institutional FOMO [fear of missing out], just like there was in retail.”
Featured Image from Stephen McCarthy/Web Summit via Sportsfile/Wikimedia Commons
Last modified: June 28, 2020 10:47 PM UTC