Perspective | Digital assets will establish a new order for the private equity market, which will become the standard investment market
According to foreign media reports on The Block on March 5, Jay Biancamano, head of cryptocurrency at State Street Bank, said that digital assets can eliminate costs and divide assets, thereby giving retail investors the opportunity to participate in the booming private equity market. He believes that digital assets will help the private equity market become the standard investment market in the next 5 to 10 years.
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In the latest podcast show, "The Scoop," Biancamano told The Block that at present, due to the blind pursuit of high performance, the market is very inefficient. Due to the fees and other costs involved in stock exchanges, the actual return of many traders is much lower than the return they can get after removing all transaction costs.
Biancamano said that digital assets provide a more efficient option and have the potential to bring order to a booming private equity market. The United States Securities and Exchange Commission (SEC) recently decided to expand the definition of qualified investors, especially to provide retail investors with more opportunities to participate in private equity transactions.
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Private equity deals, which previously had high barriers, now give small investors the opportunity to participate. So I think that when the SEC really considers lowering the barriers for individual investors to participate in private equity transactions, this is the first step in the development of the private equity market.
According to Biancamano, fractional trading makes it easier for retail investors to enter the market, while digital assets provide a more convenient way for retail investors to invest. Last year, Charles Schwab, Robinhood and Cash App launched sporadic transactions.
You can cut digital assets, which is much more efficient than cutting traditional assets.
Biancamano also used Morgan Stanley's acquisition of discount brokerage E Trade as an example to illustrate that financial institutions are increasingly paying attention to retail investors and providing them with private equity trading channels.
Morgan Stanley is a large institutional company. They now have a small consumer-oriented money management company. They can already reach tens of millions of electronic trading customers and provide them with channels for private equity transactions.
I really think that the private equity market will become the standard investment market for the next 5 or 10 years. I think digital assets will be the gateway for this kind of service, because it can provide smaller assets, and at the same time, it will be more cost-effective for large companies to provide retail customers with access to these assets.
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