There’s much hype surrounding the upcoming Bitcoin halving, with almost every industry expert forecasting an increase in the price of the top cryptocurrency when the block rewards are finally cut from 12.5 BTC to 6.25 BTC.
However, a Wall Street insider is decrying the notion that the halving is affecting one of Bitcoin’s most notable applications- investments. Kevin Koh, the Chief Investment Officer at Spartan Capital and a partner at banking conglomerate Goldman Sachs, made an appearance on the Blockcrunch Podcast with Jason Choi recently. There, he spoke about the increased institutional interest in Bitcoin as an investment vehicle, while also touching on the potential for the asset to attract even more investors as time goes on.
The Halving Doesn’t Influence Institutional Interest
However, instead of going with the general view that the halving will draw more institutional investors to Bitcoin, oh expressed skepticism, explaining that it is highly unlikely that big institutions will have a strong view on the impact on investment prospects.
“That’s not to say that you wouldn’t find an odd CIO who has researched the asset class very closely and who has a strong view and wants to deploy,” he said, “but I’d say for the average institutional investor, that’s probably not what’s driving their decision to invest in crypto.”
Koh also spoke on the various types of institutions, explaining that a lot of them have complex organizational structures that determine whether a potential investment is worth it. The due diligence requirements are rather extensive, and most of the time, it could prevent a firm from investing in an asset even if it has considerable support from the board.
Institutions’ Timing is a More Pivotal Factor
As he explained further, he hinted that organizational leadership structures have an essential role to play in the timing of a firm’s entrance into the crypto space-even more than the halving. He referenced a survey from Bitwise Asset Management, which took responses from 415 U.S.-based advisors who manage a collective $24 trillion. As the survey notes, only 6 percent of advisory firms invest their clients’ funds in cryptocurrencies.
“The other 94% largely still plan to avoid investing in crypto in 2020, and roughly 55% of them will definitely not invest in crypto this year,” he forecasted.
The sentiment from Koh about the halving and its effects on Bitcoin’s institutional investment prospects is, in a way, backed up by historical data. Institutional interest in Bitcoin has been on the rise since the asset started its resurgent drive early last year, and there’s an argument to the fact that institutions are much more interested in how the asset can grow with or without the upcoming halving.
Studies have also shown that many institutions aren’t even are of the halving that’s coming up. A recent report from Grayscale Investment read, “The halving is close enough that it’s time to start talking about it more seriously, but far enough out in the future that it’s unclear whether it’s priced into the market efficiently.”
For now, however, it remains to be seen whether the halving has been instrumental in fueling this drive.