Goldman Sachs alum who turned crypto exec breaks down why Wall Street’s next push into digital assets will be via bitcoin

  • John Haar is a managing director at crypto service platform Swan Bitcoin.
  • Her breaks down the concept of “healthy money” and the value of bitcoin for traditional finance.
  • Amid a protracted bear market, giant firms on Wall Street continue to announce crypto partnerships.

BNY Mellon, the oldest bank in the United States, said on Tuesday that it would soon hold cryptocurrencies for its customers. In September, private equity giant KKR created part of its healthcare fund available on layer-1 blockchain, Avalanche. The series of news follows closely behind a partnership between $10 trillion wealth manager, BlackRock and Coinbase.

“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on efficiently managing the operational lifecycle of these assets,” said Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships in August. blog post.

These steps mark major milestones for traditional financial institutions as Wall Street begins to step deeper into the nascent – ​​and often volatile – world of crypto.

John Haar, a director at digital asset services platform Swan Bitcoin, previously had a 12-year stint at Goldman Sachs. He says bitcoin is the biggest contender for getting to grips with legacy finance and drawing further institutional interest.

“In terms of what they’re actually getting into from a business perspective, I agree Bitcoin has taken the bulk of that,” Haar told Insider in an interview.

Investors also saw the first wave of institutional interest in crypto via bitcoin.

Morgan Stanley became the first major US bank to offer exposure to bitcoin to certain wealthy customers. Meanwhile, Paul Tudor Jones – one of the most successful hedge fund managers – said the crypto was in his portfolio. MicroStrategy, a publicly traded software company founded by Michael Saylor, bought $425 million worth of bitcoin in early August 2020.

“The next logical stop for bitcoin is to replace gold as a non-sovereign store of value assets,” Saylor said: at MarketWatch’s Best New Ideas in Money Festival.

First, the value of bitcoin, Haar says, the concept of “healthy money”, a currency that is not sensitive to sudden depreciation or appreciation. The token is “scarce”, “resistant to censorship” and a store of value because it has a fixed supply of 21 million and no centralized governing body. (Essentially, there is no Federal Reserve of bitcoin where you can inject more tokens during a bear market.)

“I think Bitcoin is easier to sell, but I think we’re still very early in terms of potential to get on board. I really think if institutions enter this space, it will be easier for them to advocate for themselves and to bitcoin investment commissions.”

Haar also says that institutions have seen bitcoin endure the bear market better than most. Altcoins like solana and avalanche are both down nearly 90% from their all-time highs, according to Messari on Friday.

As the Federal Reserve continues to raise interest rates to combat the nearly 40-year high inflation, the price of bitcoin has also continued to fall. Both Ethereum and Bitcoin were down more than 70% on Friday from all-time highs messari, while the total market capitalization of the sector was also reduced by two-thirds.

“I am aware that the price of bitcoin has dropped quite dramatically in 2022, but there are some crypto tokens that have literally gone to zero,” he said. “Relatively speaking, I think you could argue that bitcoin is a safer, more conservative investment compared to those things.”

Elsewhere, others have argued that ethereum will be the next major “on-disaster” for institutional adoption in crypto. This is partly due to the Merge, the smart contract network upgrade, which has reduced energy consumption by more than 99% and reduced issuance.

“Will there be a reversal? It would take another major macro rally for risky assets to bolster institutional bias towards ethereum,” Joshua Lim, a former trading exec at Galaxy Digital, previously told Insider.

Lim added, “We have seen massive influx into ethereum as a funding vehicle before. In the 2017 cycle, retail investors piled up in ethereum as a stepping stone to ICOs. In this cycle, institutional investors recognized ethereum as the base layer of much of DeFi and stablecoin. activity, so a lot of fresh capital entered the asset class via ethereum via bitcoin.”

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