Momentum to make crypto-assets safe for institutional investors grew with two announcements over the last two weeks. First, Northern Trust, one of the more conservative financial institutions and asset managers, told Forbes on July 31 that it plans to “pave the way for cryptocurrency hedge funds” and expand its blockchain initiatives.
“While Northern Trust Hedge Fund Services had $370 billion in assets under management as of March 31, 2018, the financial institution is not currently taking direct custody of cryptocurrency. Nor does (NT corporate and institutional services president Pete) Cherecwich expect the company will custody cryptocurrency in the near future. Instead, he says helping the company’s customers account for their cryptocurrency investments is part of a larger effort to prepare for the day when fiat currencies are also issued on a blockchain,” writes Michael del Castillo.
New York Stock Exchange parent Intercontinental Exchange (ICE) said last week that it is building Bakkt, “which intends to leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets,” according to the announcement.
Fortune contributor, Wall Street veteran, and crypto expert Caitlin Long considers it a double-edged sword. “It’s likely the beginning of Wall Street creating financial claims to bitcoin out of thin air (and not backed by actual bitcoins), which could offset some of Bitcoin’s algorithmically-enforced scarcity. Perhaps that’s why bitcoin’s price declined slightly after today’s announcement by ICE,” she writes in a cogent analysis of the crypto market.