Institutional Investors Steer Cryptocurrency Markets in a Positive DirectionDate Written: July 23 2018 Written By: Samantha Joule Fow
Bitcoin HODLers breathed a sigh of relief this week as the world’s first cryptocurrency broke through the $7,000 price point for the first time since June. This is after Bitcoin dipped near its all-time low under $6,000 at the beginning of the month. Bitcoin trades over the past few days have remained bullish and at robust volumes, leading many experts to speculate that we’ve only seen the beginning of the rally.
Bitcoin’s On a Bull Run (Again)
The recent bull run for this market-leading cryptocurrency, which has been holding steady around $7,400, brought a new optimistic shine to the virtual currency market. Of course, it’s still a far cry from cracking the $10,000 range – but it’s also pulled away from the coin’s year-to-date low of $5,800.
Whether Bitcoin will see resistance as it nears $8,000 and above is still anyone’s guess, but the pullback has given many members of the cryptocurrency community hope for a strong finish to the year. This is a particularly lofty hope given the coin market’s dismal YTD performance.
Bitcoin is still only trading at about half of its January 1 value, a massive loss that most investors have chalked up to market corrections. As speculators leave the increasingly regulated cryptocurrency markets, downward pressure is inevitable. But if Bitcoin and the rest of the cryptocurrency market achieves a meaningful turnaround in the second half of the year, who or what will be the driving force? More likely than not – the same people who run the non-crypto economy: major banks and financial institutions.
Institutional Investors Become Major Players
Cryptocurrency may have started out as a novelty enjoyed by only the savviest of techies, but it’s come a long way from there. At the beginning of the year, rumors swirled about big banks and major financial institutions getting involved in the still ravenously volatile cryptocurrency markets. Most remained skeptical, particularly as under-regulation and fraud have continued to pose major hurdles to the long-term viability of virtual currencies as mainstream financial products.
However, as it turned out, the massive profits to be had in the cryptocurrency markets were just too tempting to allow silly little things like total legal uncertainty and record-breaking cyberthefts stand in the way of big banking.
Earlier this year, Intercontinental Exchange – also known as ICE – announced that it would start providing a cryptocurrency data feed on the New York Stock Exchange. Since then, it’s been reviewing whether to launch its own crypto futures desk, as we’ve seen on the Chicago exchanges. Unfortunately for ICE, Goldman Sachs beat them to it. The investment banking giant, which currently ranks as the 60th-largest public company thanks to its nearly $92 billion market capacity, set up a cryptocurrency trading desk in May. With Bitcoin and the other major coins edging closer and closer to stable trading ranges, we are likely to see more institutional investors jump onto the cryptocurrency bandwagon in the near future.
While some crypto-purists recoil at the notion of big banks becoming major players in the crypto markets, most investors are relieved. The fact that the mainstream institutions are starting to come around to this new financial technology is a very hopeful sign for the future of the cryptocurrency market overall. After all, institutional money could help stabilize the famously volatile virtual currency markets – something that must occur if cryptocurrencies are ever to prove useful in real-world transactions.
Whether the rest of the major investment houses follow Goldman Sach’s lead or not, cryptocurrency markets are evolving in the direction of more widespread adoption. Given the potential value that blockchain technology has to offer all of us, any move cryptocurrency makes towards the mainstream is a positive sign for the future.