Anchorage chief describes institutional reaction to crypto-market downturn

The decline in crypto prices did not affect the plans of companies developing projects in the sector, and institutional investors began pouring more money into digital assets, including the DeFi segment. Diogo Monica, president of Anchorage, told Business Insider.

“They view [the market situation] as an excellent entry point if they are investors. For most of our clients who are simply developing industry projects, nothing has changed,” he said.

According to Monica, most institutional investors are oriented toward an investment horizon of 10 to 20 years.

He noted that Anchorage’s clients have different attitudes toward volatility. Some are building projects whose development may take two to three years, and at least another year will be needed to bring the product to market.

“None of the projects has been halted and did not receive a lower priority due to any changes in market prices,” he added.

According to the head of Anchorage, the organization’s clients diversify their portfolios, including with tokens from DeFi projects, and broaden their investment horizon. He emphasised that the vast majority of institutional investors hold several cryptocurrencies on their balance sheets, but in the media space they talk exclusively about investments in Bitcoin.

Monica explained their interest in new projects for two reasons: first, they recognised the potential of DeFi; second, they began to participate more frequently in venture deals that require purchasing tokens rather than shares.

The head of the crypto bank also highlighted six market areas to watch in 2021:

• stablecoins;
• non-fungible tokens;
• decentralized insurance projects;
• projects that provide yields in stablecoins;
• fiatless or crypto banks;
• robo-advisers.

In January 2021, Anchorage received the national digital asset bank license from the Office of the Comptroller of the Currency, within the U.S. Treasury. Monica said that regulator approval would allow the firm to offer staking and lending services to clients.

In June, Anchorage began issuing collateralized Ethereum loans in US dollars.

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