Standard Chartered’s global head of emerging markets foreign-exchange research is to helm the bank’s new crypto research team in London, moving into the role permanently as it expands its presence in the growing sector.
Geoffrey Kendrick is now StanChart’s head of crypto research and Western emerging markets FX, having previously served as its global head of emerging markets FX research for five years.
He will lead a team in London providing insights to clients seeking to invest or trade in cryptoassets, based on the latest developments in crypto and the bank’s pricing outlook for assets such as bitcoin and ether.
“We’re now as a bank moving into crypto, as a lot of banks are,” Kendrick told Financial News. “I’ve been working in the background on this crypto stuff for a while, I’d say the whole of this year. Hopefully, over time it will become a bigger component as we start trading and get client interest; it’s a pretty exciting new space.”
Kendrick said that while his time will be split between crypto and FX, he has been given flexibility by the bank to choose what to write about based on what is interesting at any time.
“Given crypto goes up and down 10% in a day, I’d say it’s probably going to get more focus than say euro/dollar, which goes up 10% in a year,” he said.
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StanChart has been making significant moves into cryptoassets this year, including the development of its own crypto exchange for European institutional investors to rival the likes of BitGo, Coinbase and Gemini.
The British bank also has a crypto custody service with Northern Trust named Zodia, which received FCA permission to operate in July and is now providing commercial services to institutional clients.
“The gap between traditional finance and the digital world is narrowing by the day,” said Eric Robertsen, global head of research and chief strategist for StanChart. “As our clients begin exploring cryptocurrencies, other digital assets and decentralised finance, we aim to add value to their investment and risk-management strategies and help them navigate and incorporate this new asset class into their businesses.”
Kendrick made a splash with the bank’s coverage on bitcoin and ether on 7 September, stating that bitcoin will be the eventual global winner as a currency, rather than as a pure investment. His team predicted that the cryptoasset’s price will more than double to $100,000 by early next year, and rise to as much as $175,000 in the long term.
“That’s what markets are starting to price towards. I don’t know what the timeline is but if we fast forward 20 years, it’s pretty clear to me that a lot of countries will have gone completely cashless,” Kendrick said. “Past examples of first movers, particularly in the tech space, would suggest that bitcoin is the most likely winner in that space.”
The analyst’s stance on bitcoin is in stark contrast to asset managers such as Amundi, which said in March that the concept of investing in the token as a form of digital gold was “an illusion” due to its relative youth.
“You could have made the same point in 1996 about this crazy guy Bezos who started up an online bookshop,” said Kendrick. “Clearly I’m assuming that you can pick the winner…and so I have to assume that bitcoin’s 13-year life so far gives it a massive first-mover advantage.”
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Regulators are rushing to develop rules for the sector as it grows, prompting a spate of warnings issued by watchdogs in recent months against crypto’s biggest players including Binance and Coinbase.
The crackdown has led to a delay in approvals for regulated financial instruments in the sector such as exchange-traded funds, which Kendrick does not expect to materialise in London or New York for two or three years.
“Something that allows ETFs that doesn’t squash the asset class will be the next regulatory change,” he said. “And when it comes, you’ll probably have quite a big uptick in the asset class as a whole.”
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