Crypto assets will continue to gain institutional adoption
Believe it or not, a majority of 2017’s rally that took Bitcoin from $500 to $20,000 in 18 months’ time was catalyzed by retails investors – people like you or me.
At the time, cryptocurrencies were a fad that many mom and pop investors thought could make them rich. Maybe an altcoin could turn their $5,000 in savings to a down payment on a house, or a car.
But as quick as the bubble inflated, it popped, when prices tanked by over 80 percent in 2018 as investors realized the projects they threw millions at had no intrinsic value.
Now, though, things are changing: cryptocurrencies are finally being adopted by institutional players as the bull case for these assets has become tangible.
According to Fidelity Investments‘ digital asset arm – Fidelity Digital Assets – they recently conducted a study revealing positive trends about institutional adoption in the crypto space.
The study, conducted in association with data firm Greenwich Associates, is not yet released, but it found that “digital assets continue to gain adoption and interest by a variety of institutional investors.”
This echoes a report the firm published 13 months ago, which found that 47 percent of institutional investors surveyed “view digital assets as having a place in their investment portfolios.” This was not expanded on, but Bitcoin seems to be the most common investment mentioned.
Some of the surveyed investors supportive of crypto assets said that they see digital assets as innovative technologies and a non-correlated investment that could add to the risk-return profile of their portfolios.
As reported by CryptoSlate in May, hedge fund manager Paul Tudor Jones, worth in excess of $5 billion, said that the ongoing fiscal and monetary stimulus is proving the value of Bitcoin. He called the asset the “fastest horse in the race” amid this money printing. Jones added that the digitization of currency caused by COVID-19 and by the phasing out of cash will boost BTC too.
And it isn’t only Jones.
The CME’s Bitcoin futures market has also seen consistent growth quarter-over-quarter. CME data shared by Bitwise’s Hunter Horsley indicates that the average daily open interest for the Bitcoin futures market in Q1 2020 was at an all-time high of 4,902 contracts, the equivalent of nearly 25,000 coins.
The idea goes that with investors with clout like Jones entering the market, the. “career risk for those considering” Bitcoin as an investment or career path has dropped dramatically, opening the market to even more investment from both retail and institutional players alike.