Retail Investors Motivated by Institutional players in Cryptocurrency Market

Retail Investors Motivated by Institutional players in Cryptocurrency Market

November 9, 2018 Off By Steven Anderson

Institutional players are already in the crypto market.  Hedge and endowment funds have been consistently purchasing more than $100,000,000 worth of digital assets through private transactions. 

It was not uncommon for large investors to stay away from cryptocurrency.  However, most of the major institutional investors are venturing into the crypto market.

Regular, scheduled, over-the-counter sale of coins by miners becoming is very common.  Some miners have come up with their liquidity desks.  They back operations that have $250 million through $30 billion in trades.

The high volatility of key cryptocurrencies kept the large investors away from the market.  With the Bitcoin and the Ethereum prices reaching stability this year, several traditional financial institutions have diversified their portfolios with crypto assets.

Retail investors are motivated by the involvement of large players, and they are looking at the cryptocurrencies as one of the significant investment opportunities.

Goldman Sachs Group is the first investment bank to offer Bitcoin Trading products to their clients. And several new crypto products are underway.  The new crypto trading desk of Goldman Sachs allows the trading of Bitcoin non-deliverable forward contracts.

The current demand level is attracting large investment firms to launch crypto products.

ICE from the NYSC owner has also scheduled their Bitcoin Futures Product for launch in late December.  The Bitcoin reserves that are held in ICE’s Digital Asset Warehouse will back the contracts. The sooner the contract expires, the actual Bitcoin will change hands.  These futures contracts are set to be validated via ICE Clear U.S.

With legislative changes being made on Acts ruling financial products there is improved transparency and legitimacy in the crypto-trading space.

Hayato Terai, Co-CEO of A Ganapati Group company, stated: “The ICO space will soon be undergoing similar changes.”

Since regulations and security mechanisms are improving, tokenized securities and a lot of stablecoins are being introduced by different players.  We will be seeing more interest and participation from various institutional investors.

BitGo introduced a custodian wallet that has been customized for storing digital assets of institutional investors.  Goldman Sachs’ along with Principal Strategic Investments Group and Galaxy Digital Ventures LLC invested in this new generation product.

Institutional investors are improving on their technological infrastructure to be able to accommodate more of crypto-trades. Retail investors are not staying alert about the new products launched in the market.

Institutional investors have a significant role to play when it comes to avoiding an imbalance in the market.

To prevent crashing of exchanges large volumes of institutional purchases took place. With the coming of institutional investors, there is a fear that the Bitcoin Liquidity might drop.  However, despite all these high volume buys the price did not achieve an uptrend.

 

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