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Bitcoin as a Hedge Tool, Yet the “Biggest Distraction”
Jenny Johnson describes Bitcoin as a “fear currency,” which is only seen as a hedge tool in an environment where governments might freeze funds or where fiat currencies are subject to long-term devaluation. However, she believes that while Bitcoin has its allure, it is also the “biggest distraction in the major disruption that the financial services industry is about to face.”
Investment Focus Shifts to Infrastructure
Jenny Johnson points out that the disruptive power does not lie in the crypto assets themselves, but in the infrastructure and networks that support them. “The real opportunity lies in the shovels and buckets—these are the cornerstones of powerful applications.” She views blockchain networks as “the railway tracks of the starting point,” anticipating a series of exciting consumer applications to emerge in the future. She also has high hopes for the role of “validators” in the blockchain space, as they maintain the operation of blockchain networks and can provide unprecedented transparency for active asset managers. “Imagine the informational advantage if all the capital inflows and outflows of a company could be clearly seen in the public market.”
Market Outlook and Regulatory Challenges
Since taking over as CEO in 2020, Jenny Johnson has led Franklin to actively venture into the digital asset space, launching multiple crypto ETFs and issuing the OnChain U.S. Government Market Fund, becoming one of the first tokenized investment products. She anticipates that mutual funds and ETFs will gradually transition to operate on the blockchain, enhancing efficiency and reducing costs. However, she candidly admits that the biggest obstacle currently comes from regulation. Regulatory agencies remain skeptical about digital assets, particularly because “a large number of crypto assets will ultimately fail,” and how to manage such risks continues to be a pressing challenge.