Posted 1 year ago | by Ben Armstrong
Hundreds Of Institutions Are Interested in Crypto Investments
Coinbase CEO, Brian Armstrong, said on an extensive blog post about potential major trends in the cryptocurrency space in 2020 that hundreds of institutional investors are interested in investing in the crypto market. According to the CEO of one of the biggest cryptocurrency exchanges, institutions are already investing in the emerging asset class and it will keep working throughout 2020. Crypto Investments are hot.
Massive Interest in Crypto Investments
Before 2019, high net worth individuals, funds, and investment firms had few options to invest in the crypto market securely with insurance and custodians. There was GBTC by Grayscale and CME Group’s futures market, but not many other options.
During 2019 a growing number of exchanges and regulated service providers started to provide custodial solutions targeting institutions, which means institutions have a more efficient and stable environment to invest in cryptocurrency.
“We’ve already started to see small institutions enter the cryptocurrency space. Hundreds have joined Coinbase Custody in the past 18 months. I would expect this rapid growth to continue in 2020, with larger and larger institutions coming on board. Eventually just about every financial institution will have some sort of cryptocurrency operation, and most funds will keep a portion of their assets in cryptocurrencies, partially due to the uncorrelated returns.”
Many Crypto Options Hit the Market
Many investment houses are looking for ways to enter the crypto market, either as direct investors, or as brokers for their clients.
Three Arrows Capital CEO Su Zhu told media:
“Bakkt will be likely first a trickle and then a flood. The reality is that most regulated futures contracts get low adoption on day1 simply b/c not all futures brokers are ready to clear it, many ppl want to wait and see, the tickers are not even populated on risk systems, etc.”
Anthony Pompliano of Morgan Creek Digital said in October of last year that the firm’s crypto fund secured $60 million USD from institutional investors although there was a noticeable decrease in deal value the latter half of 2019.
While crypto prices had a rough time in 2018, and a modest recovery last year, it is starting to look like there will be a lot more money chasing crypto investment. 2020 may be a good year for crypto funds, or other financial products that give institutional investors the security they need in crypto investments.