“The appetite of institutional investors has never been higher,” he added.
Even congressional partisans such as Sen. Ted Cruz and Rep. Maxine Waters are vying to make their states the oasis of crypto, Edelman added. “They’re all in,” he said.
Advisors asked why bitcoin and other digital currencies aren’t acting as a noncorrelated asset class. Edelman said the answer is simple. “If you go back to first 11 years of bitcoin, its price moved independently of every other asset,” he said. This made it a great noncorrelating asset, he said.
“Now it’s moving in step with the Nasdaq. Something happened in crypto in the past couple of months. Institutional investors, pension funds and major corporations like Mass Mutual started to buy bitcoin, realizing they’re late to the game and should have been buying 10 years ago,” he said.
When the market started declining, they started selling crypto right along with stocks. “That’s why crypto is moving in sync with the stock market. Institutional investors aren’t treating crypto as a separate asset class,” he said.