This Year, Institutional Investors Will Bet Big On Cryptocurrencies.
Unlike the stock market, which sees its eight-year bull – run thanks, in part, to institutional investors, crypto – markets are dominated by individual investors. This is something that is evident by almost every metric.
Crypto – exchanges, which are havens for individual investors, are overwhelmed. Binance, which is a widespread crypto – exchange, recently revealed that they added 250,000 new users in one single day.
50,000 new accounts are onboarding daily by Kraken, and they are log in astonishing 10,000 new support tickets every day. In one blog post, Kraken developers wrote:
The recent unexpected explosion in demand has been overwhelming.
Some exchanges, which also include Binance, Bitfinex, and CEX.io, have temporarily halted new account registrations, so that they can update their technology, as well as better prepare their platforms for the rush of individual investors flooding the market.
Furthermore, the much – anticipated future contracts of Bitcoin are also being controlled by private investors. According to Wall Street Journal:
The CFTC data show near – zero trading in Cboe’s Bitcoin futures, by banks, as well as asset managers, in a sign of how more conservative firms are keeping their distance.
– Institutional money is on its way
There is an endless speculation about crypto – bubble. Whenever prices begin to shift, or the famously volatile crypto – market fluctuates, pundits are quick to declare the bubble burst, as well as the movement over.
When cryptocurrencies endured a flash crash before Christmas, commentators also flooded the internet with their crypto post-mortems. Of course, most of the prices recovered within one single day.
In reality, the crypto – party is not winding down, but it is just getting started.
Institutional money is on its direction, and when that occurs, digital currency values will receive a significant boost.
Even JP Morgan Chase CEO and infamous crypto-skeptic, named Jamie Dimon, recently expressed some regret for describing Bitcoin as a fraud. In one interview with Fox Business, Dimon acknowledged that “the Blockchain is real.”
He also went on to express support for cryptocurrencies which represent traditional currencies like dollars and yen.
The comments of Dimon were made as CNBC reported that altcoin Ripple has more than 100 clients for the mainstream banking industry by using its XRP token.
On 11th of January, MoneyGram signed on to test the XRP token of Ripple as a digital method for sending money. The price of Ripple rose 25% after the news before receding later that day.
The burgeoning opportunities for institutional investment
As blockchain use – cases become more prevalent every day; we should expect increased institutional investment cryptocurrency markets.
The Wall Street Journal, in October, reported that investment juggernaut Goldman Sachs is considering offering a Bitcoin-related investment product.
In some comments to the Journal, a Goldman spokesman said:
In response to the interests of clients in digital currencies, we are exploring how best to serve them in this space.
The future contracts of Bitcoin on Chicago based exchanges that are run by CME Group and Cboe Group represents burgeoning for institutional investing.
They specifically indicate that much-anticipated crypto – ETF funds may soon be available for investors. Furthermore, according to estimates by Morgan Stanley, in 2017
hedge funds invested more than $2 billion in crypto – related assets. This is a lot of money, but it is a small percentage of the possible investment.
Shortly said, Bitcoin hedge funds now count their profits by thousands of percent, and the institutional investors cannot forever stay away.
As the digital currencies continue gaining exposure, they prove to be remarkably resilient to the worst fears of investors.
Nowadays, technology is improving rapidly, and a lot of the same features and safeguards currently maintaining traditional investment markets are increasingly present in crypto – markets too.
Even though the total crypto market cap is tremendous, it is far from its full potential. Just now, cryptocurrencies are becoming household names, and still, they shed some of our preconceptions which stigmatized investment.
But, institutional investors will be the real growth driver, and it will also be spurred on by the individual investors that want to take part in crypto markets through institutional platforms and by the market forces which make the possibility of considerable profits too essential pass up.