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Morgan Stanley: Bitcoin is a New Institutional Investment Class

According to new research from major US bank Morgan Stanley, as such, bitcoin and altcoins now constitute a new institutional investment class since 2017.

There is a rapidly growing interest in bitcoin and other cryptocurrencies among institutional investors while there seems to be lethargy in the number of retail buyers operating within the space.

” A Brief Teach-in and Implications” and dated Oct. 31, the multinational investment bank’s research department gave an overview of the last six months of bitcoin and brought up insights about observable trends.

The findings underscored the researchers’ observation of what the report described as the rapidly morphing thesis of the market, covering evolving perceptions of bitcoin since it was introduced into circulation as “electronic cash” in 2009.

Bitcoin has been able to provide a decentralized payment mechanism which employs the use of a distributed ledger. While it appealed to some as a novel system capable of disrupting existing business models, it also proved to be a veritable tool for facilitating new economic relationships and linkages. As a digital currency, its distributed ledger makes it easier to process retail payment transactions such as e-commerce, person-to-person payments, and cross-border transactions with lesser costs and logistics attached when compared to what is obtained in financial institutions.

According to the Morgan Stanley Research, some of the bottlenecks faced by clients who were interested in investing in the cryptocurrency industry include regulatory disparities, the absence of regulated custodial solutions, and the lack of formidable financial institutions operating in the industry.

The report highlighted developments such as the recording of all transactions on a permanent ledger, the emergence of novel and cheaper technologies than bitcoin, volatility in the market, the volume of hacks, and hard forks as concerns which have affected the bitcoin ecosystem.

In view of this, the prevailing bear market coupled with the decline in price predisposes bitcoin and altcoins as a “new institutional investment class,” and this has been the trend in the last year.

 

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