FinOps Report: Digital asset market 2021: The year of the institutional investor?

FinOps Report asked eight well-known legal experts and service providers in the digital asset market to predict what they think will happen or hope will happen in 2021 that will either increase or decrease institutional interest in the cryptoasset market.

Anton Katz, chief executive of Talos, an end-to-end technology platform for institutional cryptoasset trading, clearance and settlement, commented:

“We will see a further increase in institutional investment in the digital asset market in 2021 due to three developments: regulatory clarifications, a growing maturity by service providers, and strong institutional demand. The OCC provided some guidance when it came to the critical element of custody services, which has been a bone of contention for institutional investors. The SEC could follow suit now that it has asked for industry feedback on qualified custodians.

Service providers, such as digital asset custodians, fund administrators, prime brokers, and trading platforms, will also be moving their operating models closer to the familiar ways institutional investors are accustomed to in the traditional markets, giving them some comfort in their investment workflows. One example is how the settlement portion of the digital asset trade lifecycle is evolving and moving closer to the prime brokerage model used in most traditional asset classes. Finally, asset managers are looking to capitalize on the pent-up and growing demand for allocations in digital assets. As a result, these service providers are working to better understand the associated operational and legal risks to establish a scalable and safe investment workflow.”