Anthony Pompliano, host of the Off the Chain podcast, is bullish on crypto. He ended a recent post with the pronouncement that, “the next bull market will be bigger than anything we have ever seen before.”
While it’s always great to hear about bullish news in the crypto space, Anthony had more on his mind then just prices. In the post he laid out his vision of how traditional finance will enter the space and, most interestingly, how institutional investors will have to conform themselves to crypto standards if they want to succeed.
Institutional Money is Coming
The crux of Anthony’s argument is that institutional money is coming. Towards the end of his
“if you thought 2017’s bull market was big, just wait till the trillions of dollars allocated to alternative assets begin to roll in.”
With all of the new developments in blockchain technology it’s hard to believe this won’t be the case. An interesting point that Anthony makes, however, is that when it happens existing crypto investment firms are going to play a key role.
Crypto Investment Firms
When the regulations are in place and technology is more established, Anthony argues that institutional investment will happen in one of two ways, “as these firms begin to enter the space, many of them will choose to either (1) spend ungodly amounts of money to hire talented & experienced crypto investors or (2) pay up to acquire asset management firms that specialize in blockchain and crypto.”
Given that traditional finance will need crypto investors more than crypto investors need traditional finance, it is likely that the traditional firms will be the ones who extend the olive branch.
Why Traditional Investment Firms will Conform to Crypto
As traditional firms seek to buy out crypto asset management companies, or hire key talent, Anthony claims that there will be a large gulf between the two types of investors. “The difference is apparent in everything from dress code to ethos, which will make 50% or more of the crypto asset management firms unattractive opportunities for the incumbents.”
To bridge that gap large firms are going to have to change. Surprisingly there is already evidence of this happening. Goldman Sachs recently relaxed its dress code and many took this as a sign that Goldman was trying to make itself more attractive to blockchain developers and investors.
Anthony believes this trend will continue and more and more traditional investment firms will seek to conform themselves to the less traditional world of crypto and blockchain investment. They’ll have to because traditional firms will lack the expertise to make successful investments in crypto. Without acquiring crypto investment firms they will not have a way to get their money into the space.
This is all rather fascinating. If Anthony’s vision is correct at some point the largest investment firms, like Blackrock and Vanguard, are going to start putting their dollars into crypto. Although this might be years away and while it’s impossible to say when the bull market is going to begin, it’s going to be huge once it gets here.