An executive at the $1.5 trillion asset management giant Franklin Templeton says large institutions are becoming increasingly interested in digital assets.
In a new interview with Scott Melker, Franklin Templeton senior vice president Sandy Kaul say that financial institutions are now looking to crypto after the industry’s deep correction over the past year.
According to Kaul, institutions tend to invest in asset classes that are heavily discounted.
“Institutions hate buying in already rising markets. They want to be positioned when things are cheap and when no one is really looking at a space. And they have the patience to wait.
And so I think you’ve seen a shift in interest from the retail to the institutional side of the equation. And I think many of the leading institutions in the world, who were first in hedge funds, first in private equity, first in private debt, are looking at the crypto domain as the next, as I say, frontier risk marketplace, and they are using this period of crypto winter to put their programs in place.
Kaul predicts that institutional investment will eventually provide a strong foundation for the digital asset space.
“I think you’re starting to see that institutional importance. I think every time the market goes down, they’re going to come in and put a little bit more up and a little bit more up, and over time that’s going to create a good foundation for the markets.
And when the next bull run really kicks in and retail interest starts to build again, that institutional floor will be under the marketplace. I think this is a cycle, and we’re in the part of the cycle that’s actually super healthy for the long-term growth of the market because these settings have staying power.
At the time of writing, the crypto market cap stands at $1.05 trillion, down more than 66% from its all-time high of $3.09 trillion.
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