Many have said that the cryptocurrency industry will go mainstream once the institutional investors jump on board. Well, it turns out that they did long ago but have been making investments beneath the shadows. According to a new report, institutions such as hedge funds have overtaken high-net-worth individuals as the biggest purchaser of large crypto stashes, usually worth more than $100,000. The report further revealed that the big crypto sellers are no longer hodling and waiting for the opportune market rally but are instead selling on the regular to cover their costs which has made the industry more professional.
Crypto Is Maturing And Bringing In More Professional Players
There has been plenty of excitement about the possible approval of Bitcoin ETFs by the U.S SEC and the main reason for this is because such a product would open the gateway for institutional capital. However, according to a report by Bloomberg, institutional capital got into the game long ago and has been pulling the plugs behind the scenes.
Institutional buyers such as the multi-billion dollar hedge funds have taken a keen interest as the prices of most cryptos have stabilized. They now account for most of the large buy orders in the market, overtaking high-net-worth individuals, the report claimed. The information was revealed by Bobby Cho, the head of the Chicago-based over-the-counter crypto trading platform, Cumberland.
The report further revealed that the sellers have changed as well. Previously, the miners would hodl their crypto stashes sometimes even for months as they awaited the next price hike. Nowadays, the sellers have become more professional and are even organizing their own liquidity and trading desks.
Cho expressed his belief that the price stability that cryptos have enjoyed over the past few month has been as a result of the institutional interest.
“Over the last four to six months, the market has been trading in a very tight range, and that’s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space.
Is this the arrival of a more professional crypto market? Cho believes so:
“What that’s showing you is the professionalization that’s happening across the board in this space. The Wild West days of crypto are really turning the corner.
The report further delved into the rapid rise of over-the-counter exchanges which according to some estimates could even be processing higher trade volumes than their centralized counterparts. While centralized and regulated exchanges are strict about who gets to join in line with KYC and AML guidelines, OTC’s are more lax. Many don’t require identity verification and just connect the buyers to the sellers
The report cited previous surveys by Digital Asset Research and the TABB Group which have placed the daily trade volume on OTC’s as anywhere between $250 million and $30 billion. Centralized exchanges on the other hand facilitate around $15 billion daily.
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