While institutional investors have been slower to accept cryptocurrencies than regular investors, their adoption is accelerating.
PIMCO, the fixed-income manager, intends to expand its exposure to digital currencies such as Bitcoin (BTC) after dabbling with the asset class through crypto-linked instruments, the latest indication that big institutions are beginning to embrace the new asset class.
Chief investment officer Daniel Ivascyn acknowledged to CNBC on Wednesday that PIMCO already has exposure to “crypto-linked securities” via different hedge fund portfolios. According to him, the company intends to progressively expand its exposure to the asset class as part of its “trend-following or quantitative-oriented strategy.” He continued:
“This will be a lengthy process in which we will spend considerable time doing internal due diligence and engaging with investors. And we’ll take modest steps in a fast-expanding field.”
PIMCO was founded in 1971 and is one of the biggest asset managers in the world, specializing in active fixed-income instruments. As of December 31, 2020, the firm’s assets under control totaled $2.2 trillion.
The announcement came after Bitcoin smashed all-time highs over $67,000 and Ether (ETH) broke above the $4,100 barrier for the first time since May. As a result, the entire cryptocurrency market capitalization surpassed $2.63 trillion for the first time, according to Cointelegraph Markets Pro.
For most of 2021, institutions have piled into crypto investments, indicating the increasing popular acceptance of digital assets. According to a September study conducted by European investment firm Nickel Digital Asset Management, almost two-thirds, or 62%, of worldwide institutional investors with no cryptocurrency exposure intended to make their first investment within the next 12 months. Meanwhile, institutional money was the primary driver of Asia’s 706 percent year-over-year increase in crypto transactions, according to Chainalysis statistics.
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