Ric Edelman Says Institutional Adoption, Tokenization Are Main Crypto Growth Drivers

Institutional participation and the expansion of asset tokenization are the main growth drivers for digital assets, CoinDesk reported on June 23.

Rick Edelman, founder of the Digital Assets Council of Financial Professionals, said investor sentiment and industry fundamentals are moving in opposite directions.

Sentiment has deteriorated as billions of dollars have flowed out of spot Bitcoin exchange-traded funds and concerns have mounted over Mt. Gox wallet movements and regulatory uncertainty. Debate in the U.S. Congress over the digital-asset market structure bill known as the CLARITY Act is adding to that uncertainty.

At the same time, institutions continue to expand their digital-asset businesses. BlackRock, JPMorgan, Morgan Stanley, Franklin Templeton, Fidelity, State Street and Invesco are actively pursuing tokenization initiatives, with the assets being tokenized expanding beyond crypto to include traditional financial assets such as stocks, cash and ETFs.

He also said many financial firms are making their first crypto investments or reviewing whether to increase existing allocations.

Edelman identified passage of the digital-asset market structure bill as a key variable for the market. If the bill passes, it could deliver the regulatory clarity institutional investors have been seeking and serve as a positive catalyst for the market. If the legislation is delayed or fails to pass, short-term investor sentiment could weaken.