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Institutional investors and cryptocurrency marketPexels.com
It's official: institutional players have entered the crypto race. Bloomberg reported that large buyers, such as hedging and endowment funds, have consistently purchased more than $ 100,000,000 in digital coins through private transactions.
Miners now plan regular, off-exchange (OTC) coin sales. Some have even set up their branches and liquidity operations to cope with around $ 250- $ 30 billion in trade.
Previously, large investors had kept themselves free from the crypto-investor space due to the high volatility of the major currencies. Since the prices of bitcoin and ether have reached a certain equilibrium, more and more traditional financial institutions have begun to diversify their portfolios with cryptographic activities.
For individual investors, this active interest from older players also presents a number of new opportunities.
New crypto-investment products are underway
Considering the current demand, large investment firms will not remain long from the launch of dedicated cryptocurrency products. Indeed, Goldman Sachs Group has just become the first investment bank to offer a bitcoin trading product to its customers. At the beginning of November, the company started the onboarding of a small number of clients to test their new crypto trading desk, which allows you to trade non-deliverable forward contracts with bitcoins.
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, also has scheduled the launch of their bitcoin futures product by the end of December. The contracts will be supported by bitcoin reserves held in ICE's Digital Asset Warehouse, which means that the actual bitcoins will change hands once the contract expires. All futures contracts will be validated via ICE Clear U.S.
"Legislative changes to financial products are increasing the transparency and legitimacy of the encryption space," said Hayato Terai, Co-CEO of G8C token-issuing GanaEight Coin Ltd., a company belonging to the Ganapati group. "Even the ICO space will soon undergo similar changes: with better regulation and security mechanisms such as tokenised securities and stablecoin already introduced, we should expect more interest and participation from institutional investors".
At the start of this year, the Principal Strategic Investments Group of Goldman Sachs and Galaxy Digital Ventures LLC invested jointly in the BitGo product – a new generation portfolio specifically created for storing digital resources, designed specifically for institutional investors.
Clearly, institutional investors are increasing their technological muscles to adapt to more cryptographies. Individual investors should definitely stay up-to-date for new products entering the market.
Institutional investors can prevent market imbalances
Purchases of high-volume crypts took place at the counter to avoid swapping crypto markets and blocking trade. Much in the industry fear that bitcoin liquidity may soon become a problem due to the participation of institutional investors. However, in the last two months, the crypto markets have remained stable despite large purchases and have not exceeded the upside.
In fact, institutional investors can "anchor" the current market whales, possessing significant cryptographic participations and capable of distorting encryption prices with little or no consequences. Unlike individuals, financial institutions are largely limited in their ability to manipulate large-scale markets. So their active presence could actually contribute to more stable prices.
Crypto-trading security will probably improve
One of the biggest problems that prevent further penetration of the market for institutional investors is the lack of an adequate and secure infrastructure. At the moment, only a a handful of keepers meet the safety standards imposed by regulators.
In addition, most players have not yet identified the optimal KYC procedures for their customers. Indeed, a staggering one 68% of cryptocurrency trade in the United States and Europe does not fully comply with the KYC standard. Most of them allow users to exchange fiat and cryptocurrencies without providing any identification document or undergo a KYC check. Confidence in the encryption space remains low, especially among regulators, who, in turn, try to push stricter rules and verification procedures.
However, most institutional investors are now working closely with regulatory bodies to develop clear KYC / AML policies and guidelines that encourage both parties. Crypto EFT is approaching approval with the SEC in the United States. In Switzerland, Crypto Fund AG it has recently become the first and only asset manager, authorized by the local financial authority. The precedent has been set and more international regulators will advance with the approval of new financial instruments for institutional and individual investors.
Institutional investors offer a new inflow of capital and liquidity and promote the development and adoption of new regulatory frameworks. Ultimately, this will add more transparency and legitimacy to the encryption space and further push the markets. It is too early to evaluate the exact impact of institutional money in space, but clearly, it means an important new target for cryptocurrencies.
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Institutional investors and cryptocurrency marketPexels.com
It's official: institutional players have entered the crypto race. Bloomberg reported that large buyers, such as hedging and endowment funds, have consistently purchased more than $ 100,000,000 in digital coins through private transactions.
Miners now plan regular, off-exchange (OTC) coin sales. Some have even set up their branches and liquidity operations to cope with around $ 250- $ 30 billion in trade.
Previously, large investors had kept themselves free from the crypto-investor space due to the high volatility of the major currencies. Since the prices of bitcoin and ether have reached a certain equilibrium, more and more traditional financial institutions have begun to diversify their portfolios with cryptographic activities.
For individual investors, this active interest from older players also presents a number of new opportunities.
New crypto-investment products are underway
Considering the current demand, large investment firms will not remain long from the launch of dedicated cryptocurrency products. Indeed, Goldman Sachs Group has just become the first investment bank to offer a bitcoin trading product to its customers. At the beginning of November, the company started the onboarding of a small number of clients to test their new crypto trading desk, which allows you to trade non-deliverable forward contracts with bitcoins.
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, also has scheduled the launch of their bitcoin futures product by the end of December. The contracts will be supported by bitcoin reserves held in ICE's Digital Asset Warehouse, which means that the actual bitcoins will change hands once the contract expires. All futures contracts will be validated via ICE Clear U.S.
"Legislative changes in financial products are introducing more transparency and legitimacy into the encryption space," said Hayato Terai, Co-CEO of G8C, which releases GanaEight Coin Ltd., a Ganapati group company. "Even the ICO space will soon undergo similar changes: with better regulation and security mechanisms such as tokenised securities and stablecoin already introduced, we should expect more interest and participation from institutional investors".
At the start of this year, the Principal Strategic Investments Group of Goldman Sachs and Galaxy Digital Ventures LLC invested jointly in the BitGo product – a new generation portfolio specifically created for storing digital resources, designed specifically for institutional investors.
Clearly, institutional investors are increasing their technological muscles to adapt to more cryptographies. Individual investors should definitely stay up-to-date for new products entering the market.
Institutional investors can prevent market imbalances
Purchases of high-volume crypts took place at the counter to avoid swapping crypto markets and blocking trade. Much in the industry fear that bitcoin liquidity may soon become a problem due to the participation of institutional investors. However, in the last two months, the crypto markets have remained stable despite large purchases and have not exceeded the upside.
In fact, institutional investors can "anchor" the current market whales, possessing significant cryptographic participations and capable of distorting encryption prices with little or no consequences. Unlike individuals, financial institutions are largely limited in their ability to manipulate large-scale markets. So their active presence could actually contribute to more stable prices.
Crypto-trading security will probably improve
One of the biggest problems that prevent further penetration of the market for institutional investors is the lack of an adequate and secure infrastructure. At the moment, only a a handful of keepers meet the safety standards imposed by regulators.
In addition, most players have not yet identified the optimal KYC procedures for their customers. Indeed, a staggering one 68% of cryptocurrency trade in the United States and Europe does not fully comply with the KYC standard. Most of them allow users to exchange fiat and cryptocurrencies without providing any identification document or undergo a KYC check. Confidence in the encryption space remains low, especially among regulators, who, in turn, try to push stricter rules and verification procedures.
However, most institutional investors are now working closely with regulatory bodies to develop clear KYC / AML policies and guidelines that encourage both parties. Crypto EFT is approaching approval with the SEC in the United States. In Switzerland, Crypto Fund AG it has recently become the first and only asset manager, authorized by the local financial authority. The precedent has been set and more international regulators will advance with the approval of new financial instruments for institutional and individual investors.
Institutional investors offer a new inflow of capital and liquidity and promote the development and adoption of new regulatory frameworks. Ultimately, this will add more transparency and legitimacy to the encryption space and further push the markets. It is too early to evaluate the exact impact of institutional money in space, but clearly, it means an important new target for cryptocurrencies.
