Many of us are aware of the splash that Michael Saylor and Microstrategy are making with their huge on Bitcoin as the company store of value. Last month the business intelligence platform provider purchased another 6,455 BTC bringing their total holding to 138,955 BTC. It was trending on Twitter that they own nearly 1% of the total BTC supply that will ever be in circulation. It’s no surprise their stock trades at nearly a 0.92 correlation to Bitcoin, and the $MSTR market cap is nearly identical to the dollar value of their Bitcoin holdings.

Bank of America and Fidelity Management investing in Microstrategy

What might have gone unnoticed was the headline last week that Bank of America Securities and Fidelity Management recently purchased massive stakes in Microstrategy. Documentation shows that BofA increased their position by 47,786.08% to about $70M whereas Fidelity increased by a similar margin to about $30M. Their collective ownership of Microstrategy is just under 3% which means they indirectly own about $100M in Bitcoin.

Regardless of why these purchases were made, it is an indirect bullish signal for Bitcoin. Banks and financial institutions typically invest in securities to manage risk away from just holding Dollars, or on behalf of large clients, or as a part of a larger investment strategy. No matter where you look, institutions are looking for exposure to cryptocurrencies and blockchain regardless of the regulatory uncertainties that may try to discourage them.

Citibank on how blockchains will attract billions of users

Simply the mention of a “Web 3.0” should get the attention of asset managers trying to allocate capital towards the next wave of the most powerful tool in human history: the internet. Analysts at Citibank published a 162-page report this March on how blockchains will attract “billions of users and trillions in value”. It included the visual below representing the potential for on-chain transactions to capture value in the projected 2030 behemoth asset classes of Sovereign debt, real estate, private equity and securities lending.

KKR: a real estate asset manager tokenizing one of its funds

A further example of how blockchain is capturing value in the real estate field is with KKR, a major asset manager with $491 billion in AUM. They recently announced the tokenization of their newest Health Care Strategic Growth Fund on the Avalanche blockchain. Tokenization offers a number of benefits over traditional fund structures, including faster and more efficient settlement, reduced administrative costs, and increased transparency. It also allows for fractional ownership, meaning that investors can purchase shares in the fund with amounts previously never allowed. The tokens are compliant with US securities laws and will be available for trading on the OpenFinance Network, a regulated alternative trading system.

The move by KKR to tokenize its fund represents a significant step forward for the adoption of blockchain technology in the asset management industry.

T. Rowe Price Associates, WisdomTree, and Wellington Management supporting smart contracts

Avalanche, a smart contracts platform, announced the launch of its new Evergreen subnet called “Spruce,” which has garnered support from several high-profile financial institutions, including T. Rowe Price Associates, WisdomTree, Wellington Management, and Cumberland. By using Spruce, these financial institutions aim to address many of the issues with permissioned DeFi precluding broader institutional adoption of public blockchain infrastructure.

Conclusion

This move signals a growing trend of established financial players embracing Web3 and crypto, demonstrating a shift in the industry’s mindset towards decentralized finance and blockchain technology.

As more funds look to leverage the benefits of blockchain technology, we can expect to see increased adoption of tokenization and other blockchain-based solutions in the financial sector. Additionally, as regulation becomes more clear in the coming months, we expect more corporations to gain more indirect and direct exposure to Bitcoin and other digital currencies similar to Bank of America and Fidelity.