Institutional Money Moving Into The Asset Class, We Have Entered The Crypto Spring: Barry Silbert
- We are coming out of the crypto winter and entering the spring
- Institutions are coming and bolstering the confidence
Bitcoin, the leading cryptocurrency that is up by 119 percent till date in 2019 has been outperforming many traditional assets like S&P 500, oil, gold, and government bonds. Despite this, the crypto-asset has been written off by many prominent economists after the flagship cryptocurrency surged to $20,000 followed by an enormous fall last year.
Some like Brazilian president also has no knowledge of BTC. “I don’t know,” Jair Bolsonaro publicly denied having any knowledge of Bitcoin adding, “Is it a coin?”
People may be living under a rock or still being skeptics, but the world's top cryptocurrency is yet again proving its mettle as last month Bitcoin surged 60 percent hitting $9,100, though it has corrected as much as $7,400, it hasn’t affected the long term view of the cryptocurrency.
Currently, BTC/USD is trading at $8,129 with 24 hours of gains 1.79 percent.
“In the past four times, the price has hit record highs afterward”
According to Barry Silbert, the co-founder and CEO of Digital Currency Group who has been a part of the crypto market since 2011 and is used to the market volatility says crypto spring has arrived.
“We’ve been through quite a roller coaster. Price has gone down 80% four times. But in the past four times, the price has hit record highs afterward. And so if you look at the price for bitcoin, it looks like perhaps we’re coming out of the crypto winter and we’ve entered the crypto spring.”
There is a generational shift in how investors think about gold. What does that mean with $68T of wealth to be transferred from older to younger generations over the next 25 years? #DropGold https://t.co/HvoBbaLo4Z
— Grayscale (@GrayscaleInvest) June 12, 2019
If we take a look at the last bull cycle, the demand for bitcoin was driven by the so-called ICO mania which was at its peak that year. However, since then, the majority that is over 90 percent of the projects have failed that resorted to selling the Bitcoin raised via crowdfunding to recover the losses. The move took Bitcoin price down by over 80 percent in 2018.
However, in 2019, ICOs have declined dramatically and as Silbert notes the market has moved away from the ICO phase, which is now replaced by IEO (Initial Exchange Offerings).
Unseen Optimism & Infrastructure In The Market
The market, Silbert says has responded positively to the demand from institutional investors and venture capitalists. He further pointed out that none of the previous price rallies of bitcoin had this optimism that we are currently seeing.
“If you compare the infrastructure today relative to where it was right before the last bitcoin bull market in 2017, it’s really night and day. And so now the question is not if institutional money is going to move into the asset class, but the question is really when.”
We are already seeing one of the world’s largest asset management firms, Fidelity Investments working on rolling out a bitcoin trading service for institutional clients. Apart from Fidelity, we have Bakkt from Nasdaq’s parent company ICE, TD Ameritrade, and E-trade that indicates that more and more firms are preparing to cater to Wall Street’s appetite for cryptos.
Announcements made by these big giants help improve the sentiments of the market that still remains retail centric. Meanwhile, the number of investors holding 1 to 10 BTC increased by 126k in Q1 of 2019. The number of addresses is seeing a continuous uptrend with these addresses holding 38 percent of Bitcoins circulating supply.