Institutional Investors Continue Positioning Inside the Budding Crypto Industry Despite Legal + Trust Barriers
The cryptocurrency industry has been hoping for institutional investors to enter the space for a while, and this path is being paved quickly. Even though there are many cynics that make it look like these investors and companies are staying out, that is not exactly true. According to investment statistics cited on a NewsBTC article, there are many big names that are entering the space and making good progress.
The crypto and blockchain space has been seeing a lot of money come from “major financial institutions,” venture capital groups, and tech brands, according to Business Insider. Over the last four months, these companies have brought along 13 major deals that collectively have accumulated $850 million towards the crypto industry.
Liquid, a smaller crypto exchange, closed a Series C round that ultimately brought up the private value of the firm to over $1 billion, thanks to contributions from IDG Capital and Bitmain. Bakkt also saw a nice influx of funding worth $182.5 million, giving it a good start to the year.
The traditional finance world continues to worry about blockchain’s lack of regulatory clarity, interoperability failures, no network continuity, intellectual property management issues, and insufficient scalability.
Even with all of the worries that “finance execs” appear to have about blockchain tech, the funding keeps coming through, making it harder to deny progress of the tech and the faith of the public.
If the fiscal year keeps seeing the same involvement and investments, the industry will see the “second consecutive annual record” for funding in startups. Last year, with 117 separate deals included, the market saw a collective $2.4 billion raised. The Diar industry analytics unit states that the total raised last year amounts to $1.6 billion, but the fact still stands – the big names of traditional finance are interested, and they are contributing.
Along with the institutional influence of the funding in the market as a whole, but it is impacting Bitcoin markets as well. Matt Hougan, who is Bitwise’s head of research, said that the BTC futures volume with CME surpassed that of Binance.
Yesterday, the volume of CME bitcoin futures exceeded the volume on the single largest spot bitcoin exchange (Binance): $379m vs. $257m. https://t.co/8luckTr0s8
— Matt Hougan (@Matt_Hougan) April 23, 2019
The Bitcoin rally that started on April 2nd was a clear indication that institutions have a more significant role than people think that they do in the crypto work. The sudden increase of $1,000 on the charts is believed to be the result of a single trader, though there’s rumors that there is a major fund in Hong Kong that could have spurred it.
CoinMetrics, a research group, adds that the “committed actor” used the market to their advantage, suggesting that the trader was a deeply involved whale or institution that performed multiple trades on multiple exchanges when liquidity was low. Still, the efforts to boost Bitcoin could easily be what creates the necessary on-ramps for institutional investors.
Even with reports from Bloomberg that the US Commodity Futures Trading Commission is not pleased with the Bitcoin futures proposals, but there has yet to be any stop to the progress. Bakkt is primarily seeking approval from the strict regulators of New York, rather than just for CFTC, considering how welcoming that the state has been to Bitcoin ventures.
If Bakkt Manages to get the approval they need, the futures product can finally be launched. Considering that the institutional investors have been seeking out this type of validation, it is likely that investors have been just waiting to throw millions of dollars into the industry. Perhaps the surges in Bitcoin’s value are just beginning.
Presently, Bitcoin is trading at $5,449.54, despite a loss of 3% in the last 24 hours. It is worth noting that the majority of the top 100 coins by market cap are down by at least 3% to 10% across the board. The only coins that have gained instead of lost during the last 24 hours are the Basic Attention Token (5.75% increase), TrueUSD (0.18% increase), Dai (1.01% increase), ReddCoin (2.31%), and ODEM (14.64% increase).