NEX Markets CEO Seth Johnson Says Crypto Needs Major Structural Change
The future of crypto seems to hinge on the involvement of institutional investors in the growing markets. This concept is relatively controversial. The nature of cryptocurrencies like Bitcoin seem to scream and protest against the concept of regulation, and the idea of centralized and traditional financial powers exerting serious control on the industry and its development.
In fact, the very beginnings of Bitcoin and the whitepaper released by Satoshi Nakamoto indicted the traditional financial sector for its susceptibility to manipulation, fraud, and greed.
But the participation of institutional money in the existing crypto markets is not an assured future. Instead, some analysts speculate that several important and major changes need to happen within the industry before big money decides to lend its hands to the struggling markets in 2018 and beyond.
Despite the long road ahead for the industry, though, it seems clear that there exists massive interest in the traditional financial sector for the fast gains and high reward trading offered by cryptocurrencies and the crypto markets.
This is the opinion outlined by Seth Johnson, the CEO and founder of NEX Markets, in a speech given at the Institutional Crypto Conference this past week. In the remarks, he outlined not only his belief in the enormous potential in the crypto markets for institutional involvement and intervention, but also his firm understanding of the structural revisions needed before such intervention can occur.
“A Huge Appetite”
The beginnings of the presentation were incredibly optimistic. Johnson began by outlining his belief that the institutional space had a “huge appetite” for eventually trading cryptocurrency assets like Bitcoin, along with smaller altcoin markets which continue to gain traction. Once the industry is able to increase its organization and expand operations to more legitimized sectors, the institutional interest is set to increase significantly.
But this increase to market capitalization resultant from institutional money does not come without labor. According to this expert, several major changes need to happen within the growing crypto space before institutional investors feel comfortable putting large sums of money into the markets.
The First Step
Johnson outlined his optimism that the recent move by Fidelity to create an institutional asset class for cryptocurrencies is a “step in the right direction” for the future of cryptocurrency for institutions. The issues associated with the current state of the crypto markets, according to Seth Johnson, are primarily rooted in the custody process of assets.
He contends that the problem with the current status of custody on the blockchain is that institutional money is not all that interested in assets which might be able to “disappear.” In order to gain access to this whole new class of sophisticated speculators, the crypto markets need to find a way to add a new layer of security to the custody process of the digital assets traded within them.
Reiterating the concerns of most modern analysts, Johnson concluded that the current crypto space is a bit “like the wild west,” and that a variety of reforms are needed, many of which rely on thoughtful regulation, before big money will truly revitalize the markets.