Institutions are slowly warming to Bitcoin, which many market observers believe will lead to substantial long-term price appreciation.
Institutional investors are playing an increasingly prominent role in the Bitcoin market, and that role is likely to continue growing. For smaller investors, there are tangible benefits to this scenario.
Cryptocurrencies remain largely unregulated, which has deterred many potential investors. The Securities and Exchange Commission has so far rejected exemptive relief for any attempt to roll out a Bitcoin ETF, arguing that there is not enough protection against fraud and market manipulation in the cryptocurrency market. However, institutional investors are moving past those concerns and embracing Bitcoin in a big way.
“Bitcoin has been on an epic rally since last October. Almost week-on-week, the price has been smashing through barrier after barrier, reaching new highs,” said deVere Group CEO Nigel Green. “This momentum came as investors are looking for alternatives to traditional currencies as central banks and governments continue to helicopter new cash into economies, as Wall Street giants increasingly pursue crypto activities, and as billionaire entrepreneurs such as Tesla’s Elon Musk and Twitter’s Jack Dorsey pile into the cryptocurrency, amongst other factors.”
Bitcoin’s Limited Supply
Supply of fiat currencies is seemingly endless. After all, central banks like the Federal Reserve can print at will. Bitcoin’s limited supply enhances the allure of the digital asset.
Supply of Bitcoin is dwindling because institutional investors are piling into the market, and many retail investors are holding onto the cryptocurrency for longer periods of time.
The recent lethargy in Bitcoin could actually lure some higher-level investors into the arena.
“I believe this temporary Bitcoin price slowdown could trigger a surge in institutional investment, leading to prices going up permanently,” added Green.
Some analysts forecast that with more high-level investors entering the Bitcoin market, the crypto’s daily trading volume could exceed that of domestic stocks in four years, and top the forex market in six years.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.