Digital assets are increasingly moving into the mainstream. According to Brett Tejpaul, head of Coinbase (COIN) Institutional, institutional investors are now taking crypto seriously as part of modern investment portfolios, and the momentum is accelerating.
Tejpaul, who brings decades of experience from Barclays (BARC.L) and JP Morgan (JPM), leads Coinbase’s push to bring institutional capital into crypto. In a recent interview with Yahoo Finance Future Focus, he explained why the second wave of institutional investment is arriving now, and why regulators are playing a key role.
When asked whether institutions are finally entering the crypto market, Tejpaul said: “They are here. They’ve been here for a while, but the second wave of institutional capital is now coming in, the big catalyst to have everyone come in, because there’s been a phenomenal change in the backdrop in the US.”
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He highlighted the regulatory environment as a major driver. “Probably the most important thing was the change of administration for the Trump administration, and with it came a whole series of really super important things at the top of which is the Genius Act. And the Genius Act made stablecoins legal.
“We’re sitting on the cusp of a market structure bill as well. And so these are two ways that crypto is going to go from being unwanted within the US natural regulatory framework into a mainstream asset.”
Tejpaul pointed to recent institutional activity as evidence of demand: “No better example than what we saw with BlackRock (BLK). Together, they’ve amassed something like $100bn in the shortest period of time ever via the variety of exchange-traded funds.
“BlackRock’s iBit went from zero to $75bn in less than a year. There is evidence of demand from a combination of retail and institutional investors.”
Beyond investment, Tejpaul emphasised that crypto is gaining utility, particularly via stablecoins and payments.
“There is now a series of announcements where you have large financial institutions, challenger banks, entrepreneurs, and large institutions that are anticipating a new digital world, built on digital rails, blockchain rails, so that big moment for crypto has come,” he said.
Tejpaul explained that institutional adoption is already underway in the cryptocurrency sector, mentioning pension funds and corporate adoption.
“There have been early adopters, mostly from venture capital, and growth funds. They’ve deployed capital into this space, some on Coinbase stock before we went public. Others have allocated pension assets to bitcoin,” he said.