After the crypto bull run of 2017, the discussion around crypto shot up. This discussion has spilled over into the mainstream financial market, with some investors wondering whether BTC is the new gold.
The crypto market is cyclical and recent price stability just below $10,000 for BTC has some optimists predicting a surge in crypto prices in the next few months. They point to two key points:
The entry of institutional investors
Upcoming BTC halving
Major financial firms such as Goldman-Sachs and Morgan Stanley have shown a lot of interest in blockchain technology and digital currencies. Some of the leading financial institutions now consider crypto to be an asset class.
How Will Institutional investors affect the Price of Crypto
Institutional investors have expressed increased interest in crypto. Will this translate into increased BTC prices? In the recent past, institutional investors have overcome several barriers. For instance, many were wary of the volatility of the crypto market. The custody of assets and trading infrastructure were also under consideration due to the huge transaction volumes of institutional investors.
Due to various technical improvements in 2019, confidence amongst institutional investors is at its highest. Besides that, the crypto derivatives market has made it easier to enter the crypto market. Crypto exchanges have also created tools that allow institutional investors to enter the crypto market. With the launch of derivatives markets, it has eliminated the burden of custody for large investors, allowing them to enter the crypto market profitably and conveniently. It could be argued that crypto is now a legitimate asset class in the eyes of major institutional investors.
Crypto Exchanges and Institutional investors
A good example of how crypto exchanges are allowing the entry of institutional investors into this space is the Gemini Custody solution created by the Gemini exchange. This allows customers to trade 18 crypto coins directly on the exchange. However, they never have to move out of the security of a cold wallet. In 2019, Coinbase launched a similar product known as Coinbase Custody. By making it easier for institutional investors to enter the crypto market, they are playing an important role in making crypto an attractive investment.