Although the Canada Pension Plan Investment Board’s (CPPIB) curiosity in Bitcoin and blockchain technology is mounting, Mark Machin, the board’s head, does not feel the space is investible just yet.
In a speech Monday reported by Bloomberg, Machin admitted that the board was “watching it,” but pointed out that the reason why investors climb aboard the cryptocurrency train is because the current time is too early.
“There’s going to be lots of disruption,” Machin said, although he mentioned that there are more than 100 CPPIB personnel monitoring the space at the largest Canadian pension funds’ Toronto offices.
“The currencies themselves, I’d say it’s still early days to figure out whether this is truly institutionally investible and whether they really are liquid gold,” he said. “It’s worth paying serious attention to it.”
Although the asset class has consistently multiplied in rapid pace throughout the year, sparking curiosity and shocking the world with its continued growth, many institutional investors are uncertain in the potential of cryptocurrency. While some like Lloyd Bankfein, CEO, Goldman Sachs, are “open” to Bitcoin, others, such as Jamie Dimon, CEO of JP Morgan Chase & Co., have denounced Bitcoin as a “fraud.” Machin admitted during the speech that his Bitcoin and blockchain views align closer with Bankfein than Dimon.
It is possible that some are waiting for a bubble to burst to decide just how worthy the class would hold up, as institutional investors such as Bridgewater’s Ray Dalio have addressed Bitcoin as “a speculative bubble.”
However, the reality of blockchain and Bitcoin becoming institutional asset classes could be closer than expected, as blockchain software developer Axoni announced the success of a six-month experiment involving 11 companies, including Goldman Sachs, JP Morgan, CPPIB, Citigroup, and others.. The experiment, which utilized Axoni’s blockchain software AxCore, monitored equity swap transaction elements such as amendment and termination of operations, stock splits, and dividends.
“We know the thing works now,” Greg Schivey, Axoni CEO, said in a statement. “Equity swap data is infamously complex and difficult to manage, making it a terrific fit for distributed ledger technology. We’re delighted to have reached another key milestone alongside our partners on this project and grateful for their collaborative efforts to demonstrate how powerful this tech can be.”