As the space continues to mature, institutional interest in cryptocurrencies is increasing.A survey released by European investment management company Nickel Digital Asset Management on December 8 found that 85% of institutional investors and wealth management companies have dedicated teams responsible for them Review Cryptocurrency and digital assets. The study pointed out that the investors surveyed have approximately $108.4 billion in assets under management.The London-based company also released a report in September this year, showing that 62% of global institutional investors have zero exposure to cryptocurrencies Make their first crypto investment Within next year.
It is also worth noting that veterans on Wall Street have begun to enter the encryption industry. Recently, Matt Zhang, former head of trading at the global bank Citi, launched a new venture fund dedicated to cryptocurrency and blockchain startups. Zhang is called “Hivemind Capital Partners” and previously stated in an article by Cointelegraph that $1.5 billion multi-strategy fund It will help “institutionalize crypto investment.”
Given the growing interest of institutions in cryptocurrencies, Cointelegraph spoke with Matt Zhang during Algorand’s Decipher event in Miami to learn more about Hivemind’s plans to introduce crypto to institutions. Zhang also shared his views on the first-tier network, cryptocurrency regulations, and non-fungible tokens (NFT).
Cointelegraph: Thanks for joining me, Matt. Can you tell us why Algorand becomes your first partner And what other partnerships can you expect?
Zhang Matt: I am a multi-chain maximizationist, and I believe there will be a few amazing projects built on the first layer of the network. Algorand is providing corporate and institutional customer quality for many blockchain solutions. If you think that blockchain is a big space, you must bet that it will appear in the next 10 years or so. Therefore, the fund must find partners who can survive the next 10 years. The current size of the entire crypto ecosystem is less than US$4 trillion-this is our size. People need to slow down and find patient partners who want to build long-term relationships.
I am also actively discussing with many other leading first-tier networks to ensure that Hivemind will have a multi-chain network to help our investors see the best transaction process. I think the first layer is very different products in all blockchain ecosystems, because these networks are networks that other crypto companies are building. This means that if you are building an encrypted native platform for a service, you usually have to take advantage of one of the first layer networks, and you may want to take advantage of one of the larger, more mature options. Hivemind is currently at a different stage from other levels. I think this will be an ongoing effort and may see new partnerships in the next few months as soon as possible.
We also believe that many partners in the crypto ecosystem are still using yesterday’s model in a humane way to drive transaction flow. This may be effective, but I think the first layer of network needs to be used to view transactions. Then we can use the technology to help companies build their own platforms. This is essential and very different from the previous era of asset management.
CT: What does it mean to “institutionalize crypto investment”?
MZ: First of all, it is important to point out that yesterday’s investment model does not work in the crypto world. Secondly, I think there is still a lot of Wild West activity in the encryption field. If you want institutional investors to dominate, we need to do more than tell them that crypto investment is a great opportunity.
“You basically have to tell investors that there is an opportunity here, but we will also be able to provide the infrastructure for institutions to access it in the most compliant way. The opportunity and how to access it must go hand in hand.”
We also hope to differentiate ourselves by not only focusing on opportunities, but also on the second aspect I mentioned. Institutional investors want to ensure that they will not take operational or regulatory risks. Encryption is already interesting, so we don’t have to reinvent every aspect, but we do need to rethink the operational aspects of things.
CT: Are you saying that organizations need to hold hands?
MZ: Well, I think we need to give institutions confidence by helping them learn more about encryption. A certain level of education is required, but remember that these people are very smart. They manage trillions of dollars in assets, so they see and understand it. They will also tell you why certain things are not working. Our conversation with institutions is that they say this is a great industry, they believe in blockchain, but investing in encryption is still a problem. In fact, one of the biggest concerns for many organizations is operations.
“For example, institutions want to ensure that the funds they provide to the fund are safe, not just self-made operations. They want to ensure that the fund is compliant and that the regulator has no problems with the way the funds are used. All of this involves confidence, which is We must build.”
I also think that proper supervision is a good thing. I come from a highly regulated industry. If you want something to become mainstream, you must also work with regulators. Today, all countries are at different stages of this regulatory journey. Blockchain is decentralized. To understand the true meaning of decentralization, a lot of thinking is needed behind it. Therefore, it is fair for regulators to take time to understand and treat this area with caution.
In other words, it is very important that regulation does not stifle innovation. Innovation needs to operate quickly. The entire ecosystem must find a good balance to allow innovation to happen, while regulations keep up with the pace, and guide us to take measures to achieve sustainable growth.
CT: Does Hivemind pay special attention to a certain area?
MZ: The beauty of encryption is that you can work anywhere. No matter where you start the flywheel, there is this community approach. Ultimately, many of today’s crypto projects will be autonomous, or have an entire community contributing to them. If you think that this is where the innovation lies in 5 to 10 years, you can work backwards because it doesn’t matter where it ends.
However, where to start is important because some countries have more “friendly” regulations. However, we want to support the best projects, no matter where they are. For example, there are many visionary founders in the United States. Given that Hivemind is located in New York, we will take advantage of this and try to complete the transaction here. But we are also interested in companies in Europe and Asia. We hope to find these items systematically and use all the necessary tools to support them.
CT: What is your opinion on NFT?
MZ: Personally, I think NFT is innovative and fun. But more importantly, I am very interested in what can be built on non-fungible tokens. Currently, NFT is widely used in art and games as collectibles. This is interesting, but I think the practical layer of NFT is more interesting.
For example, some ticket companies are making tickets for NFT events. At the grassroots level, NFT is a collectible item that can be used as a souvenir for events. However, this NFT can also be used as a portal to interact with fans. Building the next level of opportunity on top of NFT is something that people in the crypto community will spend a lot of time thinking about-this is where I think the real value will move forward.