The entry of “traditional money” into the cryptocurrency market is “not surprising,” according to Hong Yea, former Executive Director at Goldman Sachs. He points to recent developments attracting institutional investors eager to diversify their portfolios.
Wall Street has funneled $35 billion into Bitcoin-focused exchange-traded funds (ETFs) in 2024, Forbes reported, with an additional $50 billion flowing in so far this year. BlackRock’s (NYSE:BLK) iShares Bitcoin Trust, launched in January 2024, has seen its net asset value total return jump over 25% this year, with assets now exceeding $86 billion — a milestone the SPDR Gold Shares ETF took 15 years to achieve, Forbes noted.
Speaking with Investing.com, Yea, now CEO of the peer-to-peer finance platform Grvt, highlighted that the sector’s momentum has been fueled in part by U.S. President Donald Trump and his family’s promotion of their own, if controversial, memecoin, $TRUMP. “Trump, once a critic of the crypto industry, heavily courted its support prior to his presidential election victory last year,” Yea explained.
Sovereign wealth funds and public pensions from Abu Dhabi to Wisconsin have also made Bitcoin ETF investments. Meanwhile, many major crypto firms have either launched or are preparing for initial public offerings, which Yea described as “marking their entry into public markets.”
Last week’s bipartisan approval in the U.S. House of Representatives of significant cryptocurrency legislation is another milestone. One such bill, the “GENIUS Act,” mandates stablecoin issuers to hold dollar-equivalent high-quality reserves, submit to audits, and comply with both federal and state oversight.
Yea called this legislation “a critical indicator” for the crypto sector, showing “a move towards clearer regulatory frameworks.”
“It is therefore not surprising to see ’traditional money’ continuing to flow into the digital asset space,” Yea said.
Beyond the U.S., regions like the United Arab Emirates and Hong Kong are emerging as major centers for digital asset development, pushing their own crypto initiatives, Yea added.
Despite this positive momentum, Bitcoin’s price slipped Tuesday amid a broader pullback in cryptocurrencies after a strong rally in the past two weeks. Bitcoin had reached record highs above $123,000, with altcoins surging alongside enthusiasm around U.S. crypto regulations and Trump Media & Technology Group Corp.’s announcement of a $2 billion crypto reserve.
However, the recent surge appears to have lost steam as Bitcoin retreated from its peak and other altcoins recorded losses. Investor risk appetite cooled amid concerns over the upcoming implementation of Trump’s tariffs starting August 1 and the Federal Reserve’s meeting next week.
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