Are Institutional Investors Already Investing in the Cryptocurrency Market?


Are Institutional Investors Already Investing in the Cryptocurrency Market?

During the last year, virtual currencies have experienced a bear trend that harmed most of the cryptocurrencies available in the market. Now, there are several investors that are watching what is happening with the virtual currency market and waiting to take a decision of what to do with their funds.

Indeed, it is possible to see that Google Trends search for Bitcoin has decreased during the whole year. The mainstream interest for Bitcoin is not here as it was during 2017. And this is what analyst Garret Keirns told Forbes.

He said that people are afraid of losing their money after investing when Bitcoin was worth more than $10,000 earlier this year. And clearly, this is something normal.

About it, Keirns said:

“People are afraid of losing money, especially the Coinbase retail crowd who bought in at $10k+. In addition to a slumping crypto market, these folks are starting to see their 401k and equity portfolios losing steam.”

He then said that Bitcoin is a much riskier asset class. That means that the investor would not substitute cryptocurrencies when they sell out of equities. In order to end this bear market, experts and crypto enthusiasts are waiting for institutional investors to place their funds into the market.

This is also what Nigel Green, founder and CEO of deVere Group, said to Forbes. He said that there is an increased feeling amongst institutions that they need to explore digital currencies. Additionally, he mentioned that these institutions think that if they do not start to invest in blockchain or virtual currencies, competitors would do it first.

If more institutions get involved in the market, it is possible to experience a new Fear of Missing Out (FOMO) in the market. This would also have an effect on cryptocurrencies.

At the moment there are several companies that are starting to develop institutional-grade solutions for companies and firms. Institutions that wanted to enter the virtual currency market were not able to do it because the infrastructure developed was not yet prepared.

The Intercontinental Exchange (ICE) is now developing a platform for institutions known as Bakkt. This would help firms interested in investing in cryptocurrencies to be sure that there is a regulated and established player offering custodial and other services.

Institutions are already here in the market, platforms are being developed and they will be able to start investing in cryptocurrencies in a very short period of time.

There are other initiatives that might also increase the interest from institutional and wealthy investors in virtual currencies. In 2019, the U.S. Securities and Exchange Commission could approve a Bitcoin ETF. This would be very bullish for the market. In 2018, several ETFs have been rejected and delayed. An ETF will allow new investors to diversify their portfolio including virtual currencies such as Bitcoin.

Back in 2003, when the first Gold ETF was approved, the price of this precious metal increased more than 300%. It is not clear what will happen with Bitcoin and the cryptomarket. However, it is clear that institutions are here ready to invest in these digital assets.

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