Katharine Wooller

Katharine Wooller

Katharine Wooller is managing director of Dacxi, a retail crypto specialist. More details at

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Financial institutions and the cryptocurrency have a long and complex history, marked by mutual mistrust and misunderstanding.  On the one hand, for banks, asset managers and hedge funds, I can appreciate that the new kid on the block can be seen as a plucky upstart intent on “eating their  lunch”.  

The crypto industry seeks to be the anthesis of banking: decentralized, immune to government interference, truly global, significantly more efficient and, allegedly, more democratic.  It has been a fascinating time to watch the relationship change from that or arch enemies, to enthusiastic bedfellows. 

Let us cast our minds back to the early days of crypto.  Utterly unregulated, and the preserve of a few individuals frantically mining and hoarding bitcoin in dark back bedrooms all over the world.  

Quite rightly the traditional financial services and banking industries saw crypto as, at best, a novel idea, and one that would probably pass.  Understandably the bunfight that was 2017 crypto boom, which saw returns in the thousands of per cents, was met by cynicism from the old guard.  In fairness they were correct: at that time more than 50 unique coins had valuations in excess $1bn valuation, making them almost overnight unicorns.  

Ripple, then almost unknown outside of crypto circles, for a brief moment, was worth more than tech gargantuan Facebook – which of course was a classic bubble, and, unsurprisingly, substantial correction followed. 

Until relatively recently, around mid 2020, the fear and loathing of crypto perpetuated.  What happened next is not only fascinating, but crucial to understanding the industry as it today, and where it is most likely going. 

Summer 2020 was a truly fascinating time in the crypto industry.  Whilst COVID ran rampant and roughshod over our health and economies, crypto slowly yet surely was becoming acceptable as a concept.  Almost overnight two almost unthinkable things happened: firstly, major stock markets dropped 30% pretty much instantaneously, and there was a real sense that our current financial framework was not fit for purpose: thus, crypto was receiving validation as an idea.   

Crypto is only needed if traditional currencies don’t work, and the coronavirus recession was a great prompt to think outside the box.  Suddenly, crypto was a viable, more efficient, cheaper way of moving value.  Moreover, frankly, there weren’t many places for investors – retail or institutional – to park their funds over this period. Investment returns Jan 2020 to February 2021 make depressing reading to those not “in the know” on crypto. 

For people like me, who work in the industry the latter half of 2020 was glorious; not only was crypto appreciating at a rate of knots, but finally the banking industry was taking crypto seriously as an asset class.

Of course, institutional interest was the prime reason for this price growth: institutional grade exchanges were finally available, and the regulatory framework was better established.  Fidelity now estimates that a third of financial institutions are exposed to crypto.  

There is overwhelming evidence that the institutions are holding rather than trading crypto, as long-term investors continue to hoard bitcoin – data provided by research firm Glassnode suggest a hoarding of bitcoin, as the total balance of bitcoin held in “accumulation addresses” has recently risen to a 3.5-year high – this in turn, of course, pushes up prices. 

Praise of crypto can be seen from a variety of reputable camps; long gone are the days when the only people praising crypto are those who work in it!   Recently converted fans include Blackrock, the largest asset manager in the world, launching bitcoin futures funds, and their Chief Investment Officer declaring bitcoin a “durable mechanism”.    

A recent report, from Citibank, to its institutional clients, suggested they expect to see bitcoin at around $318,000 in 2021, whilst JP Morgan has postulated $146,000.   

You cannot underestimate just what a huge turnaround this is.  One of my favourite 180-degree turns was Goldman Sachs, who in late May last year gave a presentation to investors listing 5 reasons why bitcoin is “not an asset class” nor “a suitable investment”; yet by early August had announced a new Head of Digital Assets, with rumoured plans for its own token.  You can see similar back peddling from other famous investors including Ray Dalio and Mark Cuban.  

I think it’s important to acknowledge that the banks who backed the crypto horse have been proven correct.  London based investment company Ruffer announced this week that on the 2.5% of its $27 billion portfolio that had been invested into bitcoin in November, they had recently taken a $750 million profit on the deal.  Unsurprisingly, this creates a reasonable amount of FOMO (“fear of missing out”)! 

In conclusion, the market cap for crypto, at time of writing is $1.1trUSD.  In my opinion is has proven itself as credible, established, and here to stay.  

Katharine Wooller is Managing Director UK and Ireland of  Dacxi  –  a unique crypto business in the crowd lending space.  

Article reflects author's own opinion.

In any circumstances can CCG be responsible for potential losses regarding investments or services, either referenced by the author in the article or by any links provided.

This platform is intended to share educational knowledge, open for several external author's and in no way represents any financial advisement.

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