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Crypto Market ‘Starting to Knock on the Doors’ of Big Bond Funds - BLOOMBERG

SEPTEMBER 23, 2021

(Bloomberg) -- Crypto investors are asking big institutions for loans against their virtual assets, even in the staid world of bond investing, said TCW Group portfolio manager Bryan Whalen. 

Investors in digital currencies such as Bitcoin are increasingly seeking loans from large institutions, Whalen said during a panel discussion Thursday at the Morningstar Investment Conference.

“The market is starting to knock on the doors of big institutions, even in the bond world,” said Whalen, a managing director in TCW’s fixed-income group, which oversees about $225 billion. “What I’ve found has crept our way is incoming inquiries about the question of lending against crypto.” 

While TCW doesn’t want to meet such requests, other types of firms, including hedge funds and alternative asset managers, may be more receptive, he said. Crypto-lending products, meanwhile, are coming under intense scrutiny from regulators.

Read more: Coinbase Drops Crypto Lending Program Plans After SEC Balks 

Fidelity Investments, one of the world’s largest money managers, is an example of a traditional player that has dipped into virtual assets. Last year, the Fidelity Digital Assets group said it would allow institutional customers to pledge Bitcoin as collateral against cash loans, in partnership with blockchain startup BlockFi. It saw hedge funds and crypto miners as potential customers, who might want to turn their digital assets into cash without having to liquidate the holdings.

“For us the role of crypto is really a cross-market, cross-company conversation,” Robin Foley, Fidelity’s chief investment officer of bonds, said in the panel discussion. “We are looking to the future as the market evolves.” 


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