Early Crypto Venture Capital Investor Deems Institutional Investors Importance Very Significant
Early Crypto Investor Deems Now’s the Time for Institutional Investors to Enter the Market
An intriguing tweet was made by Initialized Capital’s Managing Partner and early crypto investor, Garry Tan, who has since started a discussion on the entrance of institutional investors within the crypto sphere, in particular, crypto funds.
Tan, who has been known for investing in over 100 crypto startups, one being Coinbase at the time, asked questions throughout his tweets, in which he answered right away. According to the investor, better time cannot come for institutional investors other than now. As for the question, whether or not the amount invested is “negligible”, he affirms that it’s not and here is his exact reasoning:
Super confused at the fud about institutional investors coming into crypto funds.
Is it a big deal? Yes.
Is it a negligible amount? No. It’s as much as a given endowment might put into a core venture capital investment. That’s the kind of return they expect.
— Garry() (@garrytan) October 7, 2018
As we all know, Bitcoin reached all-time high in December of 2017, where it hit nearly USD$19,800. This wasn’t the only case for the giant, as altcoins followed suit. The end results? A total market capitalization of nearly USD$795 billion. Unfortunately, the same cannot be said about 2018, as the market capitalization now sits at a third of the 2017 value. Will this bear market continue?
According to a News BTC report, which considered the general assumptions of many analysts, the bear market has reached its lowest point and will now be bullish again. This argument has been supported by several cryptocurrency prices. For instance, Bitcoin has found its safe spot at USD$6,000, without any further drops. The same was argued for altcoins such as Ethereum [ETC], Ripple [XRP] and so on.
Investors Continue to Lose Money
Regardless of the fact that a possible bullish market is in the making, the losses incurred will definitely be tough to recover, depending at the rate at which cryptocurriences start to grow again. A case that has been made is that investors poured in a lot of their money because of the speculations surrounding the market’s possible “multi-million-dollar growth,” clearly this has not been favorable, as investors should have witnessed drops by at least 50 percent.
There is Always Someone/Thing to Blame
News BTC quoted an Autonomous Next report that blamed Ethereum for the overall market’s poor performance. In particular, the report shared two reasons why Ethereum was at fault and they go as follows:
“To use a project on the Ethereum platform, users have to buy and pay with a third-party token that was issued primarily for fundraising […] This, in turn, makes Ethereum less versatile, and less useful as a unit of account or medium of exchange. And second, ICOs that have raised ETH […] have to sell it to fund operations.”
Getting back to the point that it is much safer for institutional investors to enter the market, Tan suggests that it is an appropriate time for “super long-term oriented Yale model instituitions.” This was said to reference a new entry to the crypto sphere. Tan noted that “Yale’s Buffett,” David Swensen has since invested in two crypto funds.
What are your thoughts on the points made by Garry Tan? Do they align with the current status of the crypto market? Let us know in the comments below.