Institutional Investors May Be Running to Cryptocurrency: Here is 6 Reasons Why
The recent dip in cryptocurrency prices over the last six months brought skeptics out of the woodwork. Surprisingly to the die-hard believers in the industry, prices continue to drop for most tokens. Still, a majority of them see the long-term value of cryptocurrency and believe this is just a downtime for token companies. Soon, cryptocurrency coins should come out of the darkness into the light, of a new cryptocurrency spring. With the new spring for crypto, there would likely be SLU institutional investors who rush to invest in 2019.
There have been reports that at least $20 Billion dollars are currently sidelined just waiting to enter the bitcoin and cryptocurrency industry. While we have complied a list of at least 13 different Wall Street firms, there are many more considering it like BlackRock and Northern Trust to name a few even though not all cryptocurrency celebrities like Vitalik Buterin agree that institutional-grade investors are the cream of the crop.
Below, are six reasons pointing out why institutional investors will likely get involved:
Number One: Regulations are Starting to Improve for Cryptocurrency
Individuals who set regulations in place, I finally starting to admit that cryptocurrency is here to stay. However, many issues need addressing before it becomes mainstream. Scams need to disappear for the most part, tokens need to be defined and regulations must be set in place to protect investors. It's it's likely it will still be 2 to 3 years AC companies like Bitcoin hitting the mainstream market for adoption.
Number Two: Unique Returns and Volatility Are Attractive to Institutional Investors
Cryptocurrency stands on its own two feet, making it attractive first the standard methods of investing like bonds and mutual funds. Investing in virtual currency is yet one more way foreign investor to diversify their portfolio of assets, thereby increasing their ability to hit different markets. Also, at which cryptocurrency value can climb is rapid, more so than traditional stocks and bonds that we have seen in the past.
Number Three: New Derivatives Are Gaining Acceptance
Investors can now benefit crypto derivative-based services decrease the amount of losses. Although the most famous exchanges do not allow Bitcoin sales, investors can still use exchanges like BitMEX to predict the change in cryptocurrency prices. The acceptance of Bitcoin by major financial institutions proves the authenticity of the currency.
Number Four: Better Custody Solutions Are Likely Coming to the Industry
A solid foundation of worthy custodians to handle and manage various cryptocurrencies is essential. There they're not very many as of today, deemed 100% trustworthy. There is only one or two who are most trusted, Coinbase is one of them – that is just because of their partnership with ETC.
Number Five: Big Companies and Institutions Are Jumping on the Bandwagon
Blockchain technology and smart contracts are gaining mainstream respect, what're some of the largest companies in the world. Governments along with major financial institutions also see the value in the growing technology. It's because of the technologies adoption, is gaining more trust around the world could spark the #whenmoon movement.
Number Six: An ETF for Cryptocurrencies Like Bitcoin is Inevitable
With the change of opinion by the SEC, comes new view within the whole industry. They are now more concerned with fraud getting taken care of, not in banning cryptocurrency. Instead, they want to see a regulated so that investors can trade it on mainstream exchanges. By doing so, it will help investors diversify their risks to improve their investment options.
When the time comes, will you trade on major exchanges? Leave the reasons for your answer in the comment section below.