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A top executive at Bitcoin custodial firm Fidelity Digital Assets Europe says that the crypto industry is mirroring the commodities boom of the 1990s.
In a new interview with Real Vision founder and macro guru Raoul Pal, Christopher Tyrer says that crypto markets are setting up the same way commodities did decades ago.
“People are asking: is [crypto] a real investable asset class? Does this have a place in a traditional diversified investment portfolio? These are questions that we went through with commodities 20 years ago.
And we now know that pretty much every managed portfolio has some allocation to commodities as a diversifier… The setup that we had back then and the setup that we have right now, the parallels are just really striking.”
Tyrer says that in the 2000s, blue-chip companies were hesitant to invest in commodities until the proper infrastructure was set up. He says that today, crypto assets are going through the same pattern of growth.
“Prior to the early 2000s, most investment portfolios didn’t have an allocation to commodities. They were really corporate hedging markets. Then we saw a series of what I would call product regulatory market access and infrastructure developments that laid the foundation and enabled institutional participation…
Fast forward to today and I think that’s where we are with digital assets.”
The executive also highlights a two-year period of stagnation where institutions stayed away from commodoties before all of a sudden pouring in hundreds of billions of dollars worth of capital into the then-nascent industry. Tyrer notes that the same thing could happen to cryptocurrencies.
“From 2000 to 2002, there’s pretty much no institutional investment into commodities. Then from 2003 to 2010, in that eight-year period, we had around $400 billion pour in.”