Why Marshall Wace Seeks to Invest in Crypto, And Blockchain

After a period of absence, institutions seem to be showing new interest in the crypto industry. Per a report by the Financial Times (FT), hedge fund Marshall Wace is currently “plotting” investments in this industry for multiple sectors.

With $55 billion assets under management (AUM), Marshall Wace could be one of the biggest entities to enter the crypto industry, along with BlackRock, Soros Fund Management, and others. The report claims that the hedge fund will target specific areas for its investment.

Thus, the group will build a portfolio around blockchain technology, payment systems based on cryptocurrencies, digital finance companies, and other digital assets, such as stablecoins. The hedge fund will focus on projects at a late stage in their development, the FT claimed.

Marshall Wace could potentially invest in crypto companies before flotation, the report adds, and hold on to them after they debut in the stock market. The hedge fund has already tested this strategy in the healthcare sector in 2021.

Marshall Wace Wants A Piece Of The Stablecoin Business

The hedge fund has a particular interest in stablecoins and in the infrastructure built around these digital assets. The new portfolio will focus on this sector and will be headed by Amit Rajpal, chief executive of Marshall Wace’s Asia division.

The FT claims that no specific amount of money has been set for the new portfolio. The hedge fund is currently discussing the project with potential investors.

Marshall Wace’s interest in stablecoins was materialized when they took part in a $440 million fundraising round for Circle. Alongside Coinbase, this company is behind the CENTRE consortium, the entity behind USD Coin (USDC).

This stablecoin has been gaining a lot of attention lately. Research firm Messari believes USDC will become the majority stablecoin on Ethereum sooner than most expect. The current predominant asset, Tether (USDT), has been relying more on TRON’s network due to the lower fees. Researcher Ryan Watkins said:

In coming weeks it is very likely USDT’s share of the stablecoin supply on Ethereum will fall below 50% for the first time. USDC is quickly emerging as the dominant stablecoin on Ethereum in large part due to its growing role in DeFi.

In the DeFi sector, many of the protocols and their users have been switching to USDC. Thus, it has gained a lot of popularity. Watkins added:

Over 50% of the USDC supply now sit in smart contracts – equivalent to ~$12.5 billion. Although this percentage is not as high as DAI, USDC leads by a wide margin in dollar terms and has become the preferred stablecoin in DeFi for now.

DeFi on Ethereum and other networks has been attracting new users to its protocols for the past year, with 2020 being a relevant period. In the future, millions of users could leverage these protocols backed by USDC to obtain loans, borrow, trade, and more. It’s no wonder Marshall Wace wants a piece of the pie.

At the time of writing, ETH trades at $2,297 with profits across the board.