Wall Street is making it easier for a wider range of investors to buy and sell bitcoins. It is a development that should, in theory, increase prices: if a torrent of institutional money is ready to rush into a crypto, then the accumulation of professional-level infrastructure should be an advantage for things like bitcoins, ether and other offshoots. . But so far this is not the case:
Bitcoin has fallen more than 50% since December 10, when Cboe Global Markets launched its futures contract, which allows traders to hedge or speculate on the price of the digital asset in the future. The CME group started its own bitcoin derivative seven days later. While crypto trading has been haunted by regulatory uncertainty, futures seem promising development because government control bodies have blessed them and institutional investors have a deep familiarity with these types of derivatives.
Likewise, Wall Street has shown a willingness to support bitcoins if the institutional demand is there. In May, the New York Times reported that Goldman Sachs will publish offers and offers for bitcoin futures, and is examining ways to exchange encrypted tokens.
Another major concern for institutions – how to protect cryptographic participations – could be gradually resolved. Pensions and hedge funds typically rely on specialized deposit banks to safeguard their securities. Cryptographic exchanges, on the other hand, have a disturbing propensity to be violated. With this in mind, Coinbase launched a custody service last month, with the mission "to make investment in digital money accessible to any suitable financial institution and hedge fund in the world."
And last week, Intercontinental Exchange, the owner of the New York Stock Exchange – said it is starting a company and a bitcoin trading platform called Bakkt. The idea is to bring applications for digital resources together with "regulated and connected infrastructures," said ICE CEO Jeffrey Sprecher in a statement. Pending regulatory approval, ICE said it intends to start a bitcoin futures contract in November. Starbucks, which has a mobile payment service for its awards members, also participates. Bitcoin has moved lower after the announcement.
Mind you, the bitcoin is still trading at over $ 6,900, twice its level a year ago, according to CoinDesk. Even so, the prospect of greater institutional involvement does not seem to have supported prices lately. They are, after all, well below the all-time high near $ 20,000 at the end of 2017.
Kenneth Griffin, the founder of the hedge fund group Citadel, said last month that he "does not have a single portfolio manager who he said we should buy cryptography ". In his mid-year investment research perspective, Goldman's strategists have said they expect further drops in bitcoins because they do not fulfill the role of money. According to their calculations, it is not a medium of exchange, a unit of measurement or a store of value.
Of course, the bitcoin has been declared dead in the past – and then rose dramatically. But for now, the potential for greater involvement of Wall Street is doing little to feed a crypto rally.