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Institutional case for Bitcoin, Crypto still in place

In previous bitcoin bull markets, institutional adoption of digital assets was often said to be a likely factor. With the largest cryptocurrency and its faltering brethren this year, some market participants are wondering if institutional investors are out of the market.

Indeed, bitcoin prices are faltering this year, but there are clear signals that institutional investors remain engaged with the crypto. In the long term, increased institutional adoption of digital assets could be a positive catalyst for exchange-traded funds, including the VanEck Bitcoin Strategy ETF (XBTF)the VanEck Digital Assets Mining ETF (DAM)and the VanEck Digital Transformation ETF (DAPP).

Just this week, there is evidence that some well-known institutional players are getting involved in the crypto arena.

“Prices held steady even after two big announcements signaling that institutional acceptance and adoption of crypto continues to grow despite the bear market. On Tuesday, Google announced that it would consider using Coinbase’s service to store and exchange cryptocurrencies. In addition to this, BNY Mellon said on Tuesday that it will be adding cryptocurrencies to the various assets it holds as a custody manager,” Tanya Macheel reported for CNBC.

Coinbase (NASDAQ:COIN), which operates the largest crypto exchange, is the largest stake in DAPP with a weight of 8.48%. This ETF holds a variety of crypto-correlated stocks, including Coinbase, bitcoin miners, and more traditional but still crypto-exposed fintech companies.

Although it positions itself as a play on digital asset miners – and it is – DAM also presents exposure to Coinbase. The share is the eighth constituent of the ETF with a weighting of 4.77%.

Other recent examples of institutional adoption add to the longer-term cases for digital assets and crypto-correlated stocks.

“Over the past month, Nasdaq has also launched crypto custody for institutions and Franklin Templeton, Betterment, Societe Generale and other wealth managers have made inroads into crypto,” according to CNBC.

While these headlines have yet to have a significant impact on the prices of ETFs such as DAM, DAPP, and XBTF, this may be more a symptom of the macro environment than a lack of institutional enthusiasm for bitcoin. . Translation: Inflation and rising interest rates, which propel the US dollar, are among the major headwinds facing bitcoin and its peers this year. Despite these headwinds, high-profile investors are getting into crypto, and that could be telling for retail investors.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.