TabbFORUM: After the gold rush: The institutionalization of digital assets

The value of cryptocurrencies has skyrocketed over the last half year, particularly for Bitcoin, which gets most of the headlines and hit $34,000 in recent days. This phenomenal rise in value has drawn increased institutional interest, but there is one hindrance to a wider spread adoption of this new “asset class” for mainstream money managers: Regulation.

It is often said that U.S. markets are among the world’s most robust due in part to the industry’s strong working relationship with regulatory agencies and the politicians that oversee them. By that logic, it is no surprise that institutional investors have historically been reticent to add digital assets to their portfolios. Despite recent momentum, there has been little clarity as to how this market will be regulated in the years to come.

“In quite a few EU and Asia regions, the regulators are running ahead of the U.S.,” said Anton Katz, CEO of Talos, a technology provider for the institutional trading of digital assets, and former Head of Trading Technology at AQR Capital Management. “This is not bad, as US regulators tend to take a more conservative approach, but we should also be careful not to be left behind.”