How crypto is attracting some institutional investors — Huobi Global sales head

Published at: June 28, 2022

James Hume, head of sales at Huobi Global, said that while some institutional investors have gotten “cold feet” over crypto, many with billions of dollars are exploring the space.

Speaking to Cointelegraph at the European Blockchain Convention on Tuesday, Hume said that the crypto exchange had observed increasing interest from institutional investors within the last one to two years in entering the digital asset space. According to Hume, it took a long time for certain firms and hedge funds to “build teams, raise capital and understand the infrastructure” to participate in crypto, estimating that 20–30 firms with more than $1 billion could start trading with Huobi within the year.

“I think it’s a pretty exciting time,” said Hume. “A lot of the more speculative bets in crypto… Some have got a bit of cold feet, obviously, if you’re looking to come to the market and take a pretty decent size allocation.”

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The Huobi sales head added that the exchange noted that people had “slowed slightly” in investments in hedge funds, speculating that larger venture capital firms could wait out some of the market volatility, but some investors could “get scared, back out, trade, deleverage.” Some institutional investors, according to Hume, needed to be educated on the regulatory aspects of the space.

Regulatory compliance, in addition to the number of new crypto market participants and infrastructure, could affect which companies choose to place speculative, long-term bets on cryptocurrencies like Bitcoin (BTC):

“Over the past few years, the amount of places who have come out and said "we’re going to do crypto regulation" and it turns out to not be what everyone had quite hoped — either it takes too long, or they put things in places which are quite restrictive.”

Cointelegraph reported in June that Huobi had secured licenses to operate in New Zealand and the United Arab Emirates, while its Thailand-based affiliate — a separate entity — planned to shutter by July 1 after the country's Securities and Exchanges Commission revoked the firm’s operating license. The crypto exchange also announced the launch of an investment arm with more than $1 billion in crypto assets under management aimed at exploring decentralized finance and Web3 projects.

“I think everyone is in agreement now that crypto is going to be around for the long term,” said Hume. “Everyone is kind of in agreement for the most part that it’s going to be around, that it’s not a scam. There’s actual utility in the market [...] that people can utilize in the real world.”