Are Institutional Investors Fueling The Latest Bitcoin Price Increase? Binance CEO Says Not Yet
Most people in the crypto ecosystem are of the opinion that institutional investors are central to the rise in crypto popularity. However, Changpeng Zhao, the CEO of Binance thinks otherwise.
According to the new Q2 report of Grayscale, the company’s assets under management nearly tripled from $926 million to $2.7 billion. The cause of this is the resurgence of the cryptocurrency market which has had a blast in 2019. The quarterly returns for industry benchmark products, namely the Grayscale Bitcoin Trust and the Grayscale Digital Large Cap Fund were 178.8% and 147.6% respectively.
Bakkt will be testing two types of futures offerings, which will be listed and traded on the ICE Futures U.S. exchange, owned by its majority stakeholder the Intercontinental Exchange (ICE)—a leading operator of clearinghouses, data and listings services, as well as 12 global exchanges including the New York Stock Exchange.
CME Group launched its own Bitcoin futures, based on its Bitcoin Reference Rate, a once-a-day measure of the U.S. dollar price of Bitcoin calculated with digital asset exchange Crypto Facilities.
But the lack of regulation and volatility associated with cryptocurrencies have made Bitcoin a tough sell for institutional investors, most of whom believe the asset is in a bubble. CZ, however, thinks that large-scale investors are yet to join the ecosystem. Speaking to Bloomberg, CZ said:
“We have not seen institutions growing faster. What we’ve seen is a pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet.”
CZ says that retail investors still account for about 60% of trading volume on Binance, about the same percentage as last year, though both have increased.
He has warned that institutional demand for bitcoin may not be driving the latest rally as much as some had thought, and the already extreme volatility could be about to get even worse. Binance allowed traders to borrow up to three times their deposit, while rival bitcoin exchange Bitfinex is allowing loans of 100 times deposits. This is bound to make the markets more unstable.
Bitcoin’s price is $49,228.04 BTC/USD exchange rate today. The real-time BTC market cap of $921.09 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $25.87 Billion and live coin value change of BTC -2.35 in the last 24 hours.