T. Rowe Price CEO William Stromberg believes that the cryptocurrency is still in its early stages of adoption, meaning it still has room for improvement and will continue to gain traction. It is already clear that crypto claim to be the world’s currency. But 10 years ago, only the dollar and the euro were candidates.
However, T. Rowe Price itself has not yet invested in cryptocurrencies.
And to a question from the Baltimore Business Journal whether the company will ever invest in cryptocurrencies, Stromberg’s response was: “It’s early days”. So far, the company has shown good revenue growth and without investing in crypto. Its profits grew by more than 100% in the first quarter of this year.
In the first half of 2021, events have taken place that indicate the adoption of Bitcoin as an alternative asset class. For example, Tesla conducted crypto transactions. Buying $ 1.5 billion in Bitcoin in February and selling 10% of digital coins at the end of March. The automaker managed to record a profit of $ 101 million. And thanks to this, break the revenue record for the first quarter.
The largest US investment banks have also started using Bitcoin. For example, JPMorgan recently announced plans to create the first actively managed bitcoin fund. Goldman Sachs promised its clients to provide an opportunity to invest in cryptocurrencies in the second quarter of this year. There are more and more opportunities for direct investment in crypto.
What caused the interest?
The emergence of a new asset class can be compared to the emergence of the Internet and its subsequent role in the economy. Blockchain technologies and the crypto market have enormous potential to influence the global economy.
Crypto transactions don’t require an intermediary, unlike traditional money, transactions are carried out in a decentralized manner. The broader economy, built on the principle of intermediation, may change when the need for intermediaries. In particular, banks, to authenticate and guarantee transactions, decreases.
Also, cryptocurrencies are not tied to the dollar and are becoming a new opportunity for market participants to conduct transactions, regardless of the US economic policy, which allows more international transactions.
Thus, we see that the advantages of cryptocurrencies include: the speed and cheapness of transactions, the absence of barriers to cross-border transfers, as well as full ownership of the asset. More and more people are buying and storing cryptocurrency.
Even a complete ban on the circulation of cryptocurrencies is unlikely to stop their development and movement. After all, this is completely unusual, invisible money. However, hardly anyone in the world wants to completely ban them. Rather, the policy of almost all countries in this regard can be considered favorable: crypto are opening up more and more opportunities, albeit not everywhere.
Regulators’ interest in crypto
Since Bitcoin has already acquired the status of digital gold, some countries may start buying the main cryptocurrency and accumulating it along with traditional gold.
Experts are confident that crypto and traditional financial markets will begin to infiltrate each other.