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As the bitcoin (BTC) hype has faded, institutional investors and portfolio managers have begun to view the major cryptocurrency as a “serious place” to invest in, says Fred Pye, CEO of 3iQ, Canada’s first Bitcoin fund issuer.
In an interview with Cointelegraph during Bitcoin 2023, Pai spoke about the expanded regulation of cryptocurrency trading in Canada and how it is attracting investors to the digital asset market.
According to Pai, fund managers and institutional investors managing diversified portfolio assets are looking for alternative investment strategies in the face of global inflation and macroeconomic challenges.
“FOMO is no more in Bitcoin. Everything went to AI [искусственному интеллекту]. So now the institutions and the respective portfolio managers, the people in charge of managing diversified portfolios, are now starting to look at Bitcoin as a serious place.”
It’s not just about profit maximization, Pai says. For institutional investors, cryptocurrency use cases will be a growing trend in the next few years. “The theme for 2024 is definitely use cases. So, we have this wonderful technology, now let’s use this wonderful technology,” he said.
Regulatory issues for institutional adoption have been around for some time, but Canada has notably taken the lead in launching cryptocurrency ETFs in North America, given the U.S. Securities and Exchange Commission’s reservations about the cryptocurrency space.
Related: Cryptocurrency adoption is booming, but not in the US or Europe – Bitcoin Builders 2023
ETF refers to an exchange-traded fund, which is a portfolio of assets whose shares are traded on a stock market. They combine the characteristics and potential benefits of mutual funds, stocks, and bonds.
Canadian regulators have approved several crypto ETFs in recent years, including Bitcoin and Ether (ETH) products from 3iQ, Purpose Investments and Evolve Funds Group, raising millions of dollars in their crypto products.
“They were never wrong about the price,” Pai said of managing a regulated digital asset ETF in Canada, adding that “there is no difference between managing a Bitcoin ETF and a gold ETF. We track the price of Bitcoin in the same way. They have low commissions and it works. […] We can trace the origin of Bitcoin, so we only buy pure Bitcoins. And I think those are all characteristics that people are worried about.”
Canada’s latest digital asset initiative is based on a public consultation on a central bank digital currency (CBDC), where the local monetary authority asks what features the country’s citizens want included in a potential digital Canadian dollar. It is expected that the results of consultations with Canadians will be published later this year.