Nexyst’s Dimitry Sogoloff: Bitcoin And Crypto Markets’ Newness Is Unknown Risk To Institutions
Nexyst's Dimitry Sogoloff: Bitcoin And Crypto Markets' Newness Is Unknown Risk To Institutions
During an interview with Ran NeuNer for CNBC Crypto Trader, the founder of Nexyst, Dimitri Sogoloff, explained that Bitcoin (BTC) and other crypto markets are “brand new.” Now, the market is expecting for institutions and new investors to enter the space and start investing in digital assets.
Dimitri Sogoloff Talks About The Crypto Space
The founder of Nexyst said that institutional investors are hesitant to invest in the crypto space due to the fact that investors are worried about operational and infrastructure related risks. Indeed, the crypto market has been built around retail investors rather than institutions, thus, businesses are just starting to develop the first platforms for wealthier and larger investors.
Another key factor for institutions to enter the space is related to the level of maturity that the market has. He said that the crypto space is “brand new” and that this could play an important role in why institutions remain far from the market yet.
He said that companies cannot quantify the total risk of the asset class. There is no actual number that users can use to link to an operational risk of any investment.
About it, Dimitri said:
“With crypto, everything’s brand new so it’s a really tough position for a large institution to accept an unknown risk that goes into this formula and then they would really have no idea how much risk is attached to their investment.”
In addition to it, Dimitri said that virtual currencies are far from being widely adopted by large firms and institutions. Nonetheless, as soon as custody and security improvements, new firms will start entering the market and purchasing digital assets.
He also said that institutions are not going to be deploying a meaningful amount of capital in the space. He said that the might invest between 1% and 5% in the next years.