A senior executive at the $1.5 trillion asset management giant Franklin Templeton says that Ethereum (ETH) staking yield is presenting big opportunities for institutions looking at the crypto markets.
In a new interview on Real Vision with Raoul Pal, Pal asks senior vice president of Franklin Templeton Sandy Kaul if Ethereum staking could help spark institutional adoption.
In response, Kaul says,
“Let me just say, stay tuned to that space because I’ve seen some extremely powerful products that I think will fulfill exactly what you’re talking about.”
The asset management expert says the development of the crypto industry is reminding her of the hedge fund space in the mid 2000s, when institutions pounced on big market discounts to establish themselves and take control.
“I think what happened in the hedge fund industry up to and post 2008 really is instructive here… We saw almost $2 trillion in assets come in in a three year period, so a huge influx of money, interestingly, taking the industry close to $3 trillion in assets, which is right about where the digital space got to before the last collapse.
Then what you saw was a real turnover of the underlying investment base. And what we’re seeing now and what we’re picking up on now in the digital asset space is this same turnover. We’re hearing increasingly, and seeing, institutions replacing the retail money that’s being withdrawn, and institutional money starting to account for larger and larger shares of digital asset holdings.
Institutions are long-term holders. They wait for these kinds of wipeouts to come in and establish positions, and they will wait for the market to turn. To be very clear, it’s usually the most market-leading institutions that are really looking to be very creative in their portfolios and who have really shifted to this factor-driven model and realized that this digital asset space is bringing in a whole new set of what we’re calling ‘crowd factors’ at Franklin Templeton that they have never been able to get exposure to in the space.”
Kaul says that another wave of institutional adoption will likely occur during the next bull run when institutions see their competitors profiting.