EY Leader: Crypto ETFs Could Unlock $200 Trillion in Institutional Capital

The global blockchain leader at Ernst & Young (EY), Paul Brody, recently shared his insights on the cryptocurrency market and its potential growth drivers. In an interview with CNBC’s “Street Signs”, Brody highlighted the huge demand for crypto assets from institutional investors, who are waiting for regulatory approval of crypto ETFs (exchange-traded funds).

Brody explained that while some family offices, which are more flexible and risk-tolerant, have already invested in cryptocurrencies, other institutional funds, such as pension funds and sovereign wealth funds, are restricted by their mandates and fiduciary duties. These funds collectively manage over $200 trillion in assets, according to Brody, and they are looking for ways to access the crypto market through regulated and transparent products.

He also discussed the risks and opportunities of the crypto market, especially in relation to inflation and geopolitical uncertainty. He noted that Bitcoin has a unique feature that makes it more inelastic than other assets, such as gold, which can increase their supply when their price rises. Bitcoin, on the other hand, has a fixed and finite supply that cannot be changed by market forces.

And also compared the different use cases of Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization. He observed that Bitcoin is mainly used as an asset class, not as a payment tool, while Ethereum is used as a computing platform for various applications, such as decentralized finance (DeFi), stablecoins, and business transactions.

Brody concluded by stating that the future of payments is likely to remain with fiat currencies and stablecoins, which are digital tokens backed by fiat or other assets. He also predicted that central banks will play a more prominent role in the digital economy, as they issue their own digital currencies or support existing ones.

He is one of the leading experts in the blockchain industry, and he oversees EY’s investments, solutions, and contributions to the public domain in this field. EY recently announced its commitment to invest more than $100 million in research, engineering, and services of blockchain and crypto asset technology.