Latest news with #NikolaosPanigirtzoglou
Business Times
3 days ago
- Business
- Business Times
Tokenisation boom? Wall Street still isn't biting, JPMorgan says
[NEW YORK] Despite billions poured into blockchain initiatives promising to reshape finance, the idea of putting traditional assets such as bonds, funds and private credit on blockchain rails has yet to win over major institutional investors. The market for tokenised real-world assets, long touted as crypto's bridge to mainstream finance, remains small, with a total value of just US$25 billion, according to JPMorgan Chase. And most of that, the bank says, is driven by crypto-native firms rather than Wall Street incumbents. For all the hype, the total tokenised asset base remains 'rather insignificant', JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a recent note. Key obstacles include fragmented cross-border regulation, legal uncertainty, and limited trust in the enforceability of smart contracts, or blockchain-based computer programs. 'This rather disappointing picture on tokenisation also reflects traditional investors not seeing a need for it thus far,' the team wrote. 'There is also little evidence so far of banks or customers moving from traditional bank deposits to tokenised bank deposits on blockchains.' Tokenisation, the process of creating blockchain-based representations of real-world assets such as stocks or Treasury bills, has been touted as a way to make financial markets faster, cheaper and more transparent. In theory, tokenised funds could offer near-instant settlement and disintermediate legacy infrastructure. But that vision remains largely theoretical. Some firms are experimenting. Fidelity Investments filed for an 'on-chain' share class of its Treasury money market fund this year. Exchange-traded fund (ETF) and mutual-fund manager VanEck launched its tokenised VBILL fund with similar exposure to government debt. BlackRock's digital liquidity fund, BUIDL, peaked at US$2.9 billion in assets in May before slipping to US$2.3 billion as at Aug 6, according to tracker BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Washington is also paying attention. The US Securities and Exchange Commission recently launched 'Project Crypto', a new initiative under chair Paul Atkins to explore how US markets might adopt blockchain-based settlement. But so far, real-world adoption remains narrow and shallow. Secondary market activity in tokenised bonds and private assets is minimal. Even the US$15 billion in tokenised private credit cited by JPMorgan is heavily concentrated among a handful of players. Still, proponents argue that tokenisation is following a slow but inevitable adoption curve, mirroring the early days of the Internet or ETFs. If regulatory clarity improves and infrastructure matures, some say the technology could eventually reshape the plumbing of financial markets. For now, traditional investors still see limited utility. The existing financial system continues to get faster and more efficient, undermining the need for radical change, while concerns about legal clarity, operational risk, and ecosystem fragmentation persist. 'It remains to be seen how effective regulations would be in addressing institutional investors' hurdles and concerns,' JPMorgan wrote, adding that institutional interest in crypto remains largely confined to Bitcoin exposure. BLOOMBERG
Mint
3 days ago
- Business
- Mint
Tokenization Boom? Wall Street Still Isn't Biting, JPMorgan Says
(Bloomberg) -- Despite billions poured into blockchain initiatives promising to reshape finance, the idea of putting traditional assets like bonds, funds and private credit on blockchain rails has yet to win over major institutional investors. The market for tokenized real-world assets — long touted as crypto's bridge to mainstream finance — remains small, with a total value of just $25 billion, according to JPMorgan Chase & Co. And most of that, the bank says, is driven by crypto-native firms rather than Wall Street incumbents. For all the hype, the total tokenized asset base remains 'rather insignificant,' JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a recent note. Key obstacles include fragmented cross-border regulation, legal uncertainty, and limited trust in the enforceability of smart contracts, or blockchain-based computer programs. 'This rather disappointing picture on tokenization also reflects traditional investors not seeing a need for it thus far,' the team wrote. 'There is also little evidence so far of banks or customers moving from traditional bank deposits to tokenized bank deposits on blockchains.' Tokenization — the process of creating blockchain-based representations of real-world assets such as stocks or Treasury bills — has been touted as a way to make financial markets faster, cheaper and more transparent. In theory, tokenized funds could offer near-instant settlement and disintermediate legacy infrastructure. But that vision remains largely theoretical. Some firms are experimenting. Fidelity Investments filed for an 'on-chain' share class of its Treasury money market fund this year. ETF and mutual-fund manager VanEck launched its tokenized VBILL fund with similar exposure to government debt. BlackRock Inc.'s digital liquidity fund, BUIDL, peaked at $2.9 billion in assets in May before slipping to $2.3 billion as of Aug. 6, according to tracker Washington is also paying attention. The US Securities and Exchange Commission recently launched 'Project Crypto,' a new initiative under Chair Paul Atkins to explore how US markets might adopt blockchain-based settlement. But so far, real-world adoption remains narrow and shallow. Secondary market activity in tokenized bonds and private assets is minimal. Even the $15 billion in tokenized private credit cited by JPMorgan is heavily concentrated among a handful of players. Still, proponents argue tokenization is following a slow but inevitable adoption curve, mirroring the early days of the internet or ETFs. If regulatory clarity improves and infrastructure matures, some say the technology could eventually reshape the plumbing of financial markets. For now, traditional investors still see limited utility. The existing financial system continues to get faster and more efficient — undermining the need for radical change — while concerns about legal clarity, operational risk, and ecosystem fragmentation persist. 'It remains to be seen how effective regulations would be in addressing institutional investors' hurdles and concerns,' JPMorgan wrote, adding that institutional interest in crypto remains largely confined to Bitcoin exposure. --With assistance from Olga Kharif and Denitsa Tsekova.
Yahoo
25-07-2025
- Business
- Yahoo
Crypto Inflows Surge to $60B Year-to-Date, Outpacing Private Equity: JPMorgan
Capital is flooding into digital assets at a record pace this year, according to Wall Street bank JPMorgan (JPM), marking a sharp contrast with declining flows into private equity and private credit markets. JPMorgan estimates that net capital inflows into digital assets have hit $60 billion year-to-date, a nearly 50% jump since the firm's last update at the end of May, the bank said in a report on Wednesday. That figure includes crypto fund flows, Chicago Mercantile Exchange (CME) futures activity, and crypto venture funding, and puts 2024 on track to eclipse last year's record. 'The surge of capital inflows into digital assets over the past couple of months has likely been supported by favorable U.S. regulations,' analysts led by Nikolaos Panigirtzoglou wrote. Notably, the passage of the GENIUS Act in Congress provided long-awaited regulatory clarity around stablecoins, establishing global standards for dollar-backed tokens and triggering competitive responses abroad, the authors wrote. China is pressing ahead with its digital yuan rollout, and a yuan-backed stablecoin is now in the works in Hong Kong. Meanwhile, the CLARITY Act, currently moving through Congress, aims to define whether digital assets are securities or commodities, potentially making the U.S. more attractive for crypto-native companies compared to the EU's Markets in Crypto-Assets (MiCA) framework, the report said. This friendlier regulatory climate is fueling a resurgence in both private and public crypto markets. Crypto venture capital (VC) funding has picked up, while public market interest is growing following Circle's (CRCL) initial public offering (IPO) and a flurry of new filings with the Securities and Exchange Commission (SEC), the bank noted. Altcoins are also experiencing renewed investor attention, the report said, and ether (ETH), in particular, has benefited from its central role in decentralized finance (DeFi) and smart contracts, and is increasingly being added to corporate treasuries alongside bitcoin. Asset managers have begun exploring new altcoin-based crypto exchange-traded funds (ETFs), some with staking features, signaling rising institutional appetite beyond bitcoin (BTC), the report while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
JPMorgan Sees Stablecoin Market Hitting $500B by 2028, Far Below Bullish Forecasts
The stablecoin market is poised to grow to $500 billion by 2028, according to JPMorgan (JPM) strategists, a projection that falls well short of some of the more exuberant forecasts calling for a $1 trillion to $2 trillion market cap within the same timeframe, the Wall Street bank said in a research report on Thursday. In the note led by strategist Nikolaos Panigirtzoglou, the bank outlined a more tempered view of the sector's trajectory, arguing that crypto-native demand, not broader payment adoption, remains the primary driver of stablecoin usage. 'We find forecasts for an exponential expansion of the stablecoin universe rom $250 billion currently to $1 trillion-$2 trillion over the coming years as far too optimistic," the team wrote. Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets, providing among other things a payment infrastructure, and are also used to transfer money internationally. According to the bank's analysts, roughly 88% of stablecoin demand today comes from crypto-native activity, including trading, decentralized finance (DeFi) collateral, and idle funds held by crypto firms, with payments accounting for just 6%. Even under generous assumptions, the growth of stablecoin use in payments would only marginally increase overall market size, the report said. JPMorgan also dismissed the likelihood of a large-scale shift from traditional bank deposits or money market funds into stablecoins, citing the lack of yield and added friction in moving between fiat and crypto. The firm's analysts pushed back on comparisons with China's e-CNY or the rise of Alipay and WeChat Pay, noting that these systems are centralized and not representative of how stablecoins operate. Ultimately, the bank sees moderate, crypto-driven growth as the most realistic path for stablecoins, not a mass adoption story. Some banks are more bullish than JPMorgan about the outlook for stablecoins. The Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act is expected to be passed in the U.S. in the coming months, and that could trigger an almost 10-fold jump in stablecoin supply, investment bank Standard Chartered said in a research report in April. U.S. legislation "would further legitimize the stablecoin industry," the bank's analysts wrote at the time, adding that "we estimate this would cause total stablecoin supply to rise from $230 billion today to $2 trillion by year-end 2028."Sign in to access your portfolio
CNBC
26-06-2025
- Business
- CNBC
JPMorgan's market prediction model says equities look safe for the next 6 months
JPMorgan researchers have come up with a relatively simple way to predict what's next for the stock market, and it has good news for investors. Strategist Nikolaos Panigirtzoglou said in a note to clients that his team updated a stock prediction model that currently sees the market moving higher in the back half of the year. The model uses six signals — economic momentum, price momentum, turnover, value, positions and flows — to predict the move in the S & P 500 over the next six months. The latest reading is quite confident that stocks will go up. "The current probability of 96% is well above the 75% cutoff, implying low probability of a down move in the S & P 500 over the next six months based on the model inputs," Panigirtzoglou wrote. .SPX YTD mountain The S & P 500 was flirting with a new record high on Thursday. Of the signals used in the model, flows are currently the most supportive of the idea that stocks will rise. That signal is based on the difference between equity and bond fund flows tracked by the firm, relative to history. That data, published in the same note, shows that equity funds have seen outflows over the past four weeks, while bond funds have seen inflows. The same dynamic holds when looking at just U.S. funds. This means the S & P 500 has trended back up to near record levels even with many investors whittling down their stock exposure. Even retail traders are not all-in on stocks at the moment, according to JPMorgan. "The retail impulse into equities improved somewhat in June after a very weak May but it still looks modest vs. its recent history," Panigirtzoglou wrote. The latest update is a change from how the JPMorgan model used to work. The strategist found that putting those six variables into a logit model — a regression calculation that is simple by Wall Street standards — performed better than using an artificial intelligence model with similar inputs, as well as several other modeling approaches. In particular, the logit model excelled at predicting down moves in the market relative to other techniques. — CNBC's Michael Bloom contributed reporting.
