If you are the type of investor who has quite a high risk tolerance, then perhaps, you consider this the opportunity to buy some cryptocurrencies. However, the reality is that no one exactly knows if this is already the lowest. However, if you will look at how Wall Street firms behave, then you could come up with a conclusion that the crypto market is far from being dead. There are a growing number of Wall Street firms that are now interested in crypto custody and asset management.
Bitcoin in 2017 experienced a meteoric rise reaching almost $20,000 by mid-December. However, there was even a point when Bitcoin reached around $5,700 in June.
Large Trading Volumes
According to Sanford C. Bernstein & Co analysts, he refuted that the crypto market is struggling mainly because of the large trading volumes generating large revenues for crypto exchanges. And because of the bear market, there is an increase in the number of Wall Street firms looking to enter the crypto market to take advantage of a low market.
The analysts told Bloomberg that “As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms”.
There is already interest coming from well-established banks including Goldman Sachs and JPMorgan. Their initiatives have involved cryptocurrencies. In June, the newly appointed CEO and Chairman of Goldman Sachs, David Solomon, mentioned that “We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too”. This was the first time that Goldman Sachs acknowledged that they are clearing Bitcoin futures.
Then, you have companies like Square and Robinhood that took advantage of the crypto industry’s potential. Jack Dorsey’s Square along with Robinhood have been offering crypto trading services since the early part of the year. And he expressed optimism towards the crypto market.
Robinhood co-CEO Vlad Tenev has been able to secure a $5.6 billion valuation right after the integration of its crypto business. He mentioned that We don’t intend to make very much money on it at all for the foreseeable future. We intend to operate it as a breakeven business. The thinking behind that is what we’re really doing is building an ecosystem. Right now the products are investing products, so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade”.
When Are Institutional Investors Going To Enter?
Of course, there is still the question when are the institutional investors going to enter? Considering the fact that there are regulatory changes in the market, it could convince institutional investors to enter the market. In fact, a bearish market could do this.
There are those thinking that a Bitcoin ETF is needed in order to trigger institutional investors to participate. Will this finally happen in the coming months? The Winklevoss twins’ Bitcoin application has already been denied twice. The concern is the possibility of market manipulation. Could this all change by next month when the SEC resumes taking a closer look at ETF applications?