Like the hype around Bitcoin (BTC) has faded, institutional investors and portfolio managers have begun to view the top cryptocurrency as a "serious place" to invest, says Fred Pye, CEO of 3iQ, Canada's first Bitcoin fund issuer.
In an interview with Cointelegraph during Bitcoin 2023, Pye discussed Canada's advanced regulation for cryptocurrency trading and how it has been attracting investors to the digital asset market.
According to Pye, fund managers and institutional investors managing diversified portfolio assets are looking for alternative investment strategies amid a global inflationary environment and macroeconomic challenges.
โFOMO on Bitcoin is gone. Everything has moved to AI [artificial intelligence]. So now the right institutions and portfolio managers, the people responsible for managing diversified portfolios, are starting to take Bitcoin seriously."
It's not just about maximizing profit, Pye says. For institutional investors, cryptocurrency use cases will be a growing trend in the coming years. "The theme for 2024 going forward is definitely use cases. So, we've got this beautiful technology, now let's put that beautiful technology to work," he said.
Regulatory challenges to institutional adoption have been around for a while, but Canada has taken the lead in launching crypto ETFs in North America, given the US Securities and Exchange Commission's reservations towards the crypto space.
Related: Cryptocurrency Adoption Is Booming, But Not In The US Or Europe: Bitcoin Builders 2023
ETF refers to the exchange traded fund which is a portfolio of assets whose shares They are traded on a stock exchange. They combine the features and potential benefits of mutual funds, stocks, and bonds.
Canadian regulators have approved several crypto ETFs in recent yearsincluding Bitcoin and Ether (ETH) products of 3iQ, Purpose Investments, and Evolve Funds Group, drawing millions of dollars into their crypto products.
โThey have never been mispriced,โ Pye said of running regulated digital asset ETFs in Canada, adding that โthere is no difference between running a Bitcoin ETF and running a gold ETF. We track the price of Bitcoin identically. They are low fees, and it works. [...] We can encrypt the trail of where the Bitcoin came from, so we're just buying clean Bitcoin. And I think these are all characteristics that people are concerned about."
Canada's latest initiative towards digital assets builds on a public consultation on a central bank digital currency (CBDC), with the local monetary authority. asking what features the citizens of the country want to be included into a potential digital Canadian dollar. The results of the Canadian consultation are expected to be published later this year.
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