The crypto-market mayhem has even got the first Bitcoin ETF in the red after a stellar debut. According to a Bloomberg report, BITO is now among the 10 worst performers amid the broader market weakness.
Meanwhile, it’s important to recall that mainstream funds had also dived deep into the sector through the last year. For instance, Houston Firefighters’ Relief and Retirement Fund (HFRRF) announced it was investing in Bitcoin and Ether as part of its pension portfolio.
Having said that, Ether Capital CEO Brian Mosoff thinks that the market volatility will continue. In a recent interview, he said,
“The more structured products come to market, you know, the better for these pension funds. They need ways to get access points to own these assets in ways that are safe and secure, and fit. More into the traditional box that they’re comfortable with. “
Even with the current volatility, Mosoff is hopeful for the new launches in the year ahead. He further said,
“There were really exciting things happening last year. We have the narrative around DeFi and NFT’s and now we’re seeing things like staking emerge, which is the ability for people to generate yield off these assets. So there’s a lot to be excited about as we move into 2022.”
It is worth noting that after the DeFi and NFT boom, the previously niche market of staking gained traction in 2021. It turned into an $18 billion industry in Q3 2021, as per the quarterly report by Staked. Mosoff believes that staking will generate yield on “traditionally unproductive commodities.” This could be the next stop for the pension funds, with the CEO stating,
“The fact that you could take these assets and generate a yield of you know, five or 10% a year is something that they’re going to want to participate in.”
However, he believes that there is a “lot of upside in this asset class” if it continues to get support globally.
“It’s gonna be a hard asset class to ignore long term.”
But, what purpose will Bitcoin serve?
The positioning of Bitcoin, in the long run, is one of the harder questions to answer and remains a hot topic of debate. The Ether Capital CEO is also unsure if Bitcoin can be called digital gold, a hedging asset, or something which is closer to growth and tech stocks. However, he is certain it’ll remain about one thing –
“I think over time, you know, it’ll untether itself from other assets. It’s certainly still being treated very much as a risk-on asset.”