Many are anticipating the entry of institutional investors. Since the crypto market has experienced a bearish trend over the past months, many are anticipating for fresh capital that could encourage another bull run for the industry.
The likes of Tom Lee believes that regulatory clarity is needed in order for institutional investors to enter the picture. In reality, regulatory changes are happening. And though the bull-run hasn’t happened yet, there is development within the market that slowly gets the attention of serious players that can contribute a serious amount of capital to the market. In fact, the likes of Goldman Sachs and ICE have already looked closely at the crypto market. ICE even partnered with Microsoft and Starbucks.
According to a report released by consulting firm Greenwich Associates, 70% of intuitional finance executives that have been surveyed believe that cryptos are here to stay and will have a place in the future of the industry.
According to Richard Johnson who is the vice president of Greenwich Associates, “They’re telling us that they don’t think it’s going away and that it’s here to stay”. The survey was conducted on 141 institutional investment executives. Majority of these respondents believe that the regulatory framework is going to develop around the crypto market. This can lead to growth and innovation.
Tough Year for Cryptos
Undoubtedly, the crypto market is currently dealing with a bearish market. From the time that the crypto market reached its peak in January, it has declined close to 80%. Also, Bitcoin that was trading at near $20,000 in mid-December of last year plummeted even traded around $5,700 in June.
However, it is worth mentioning that there is anticipation by the market for a Bitcoin ETF. The US Securities and Exchange Commission is set to decide on the fate of VanEck and Solid X’s Bitcoin ETF application this month. In order to avoid confusion, it even stopped two crypto-related products.
But of course, it is still not sure whether or not we are going to have a Bitcoin ETF soon. The agency decided to reject nine filings for a Bitcoin ETFs last month not to mention that of Cameron and Tyler Winklevoss. The agency stated the possibility of price manipulation as the reason for its rejection.
What Makes Cryptos More Accessible to Banks?
According to the report, there are two things that can be developed that could potentially help banks and asset managers to become more involved in the crypto niche. This involves the development of ETFs and futures. These products can allow instructions to get more exposure to cryptos and custody.
According to Johnson, despite the setbacks, there is enthusiasm among institutional investors. Also, he indicated that the development of stablecoins such as the Gemini Dollar shows institutional progress in the crypto field. Johnson said that “We’ve had a terrible market for crypto this year, but people are still coming out with a lot of great innovation and a lot of great ideas”.
Currently, the crypto market has lost almost 80% of its all-time high market capitalization since January. Are we going to see more institutional investors enter the picture this year?