Institutional Investors Enter the Crypto Market: Is 2019 the Year Crypto Rises Again?

Institutional investors have been investing in cryptocurrency funds amid crypto’s all-time low, which leaves us to wonder, “Is 2019 the year for Crypto?”

Cryptocurrency has become a global phenomenon since Bitcoin has headed to the moon and hit its highest from mere $900 to almost $20,000 in December of 2017. However, cryptocurrencies have lost its mainstream hype when the ‘crypto-bubble’ popped in the closing of 2018. Despite this, most crypto experts still predict that 2019 will bring better things for the crypto industry. And now that 2019 is in the closing of its first month, the question is: are these predictions coming into fruition?

What do experts say?

To make things big for 2019, institutional investors have entered the crypto race. Institutional investors are becoming more involved in the cryptocurrency market than many observers may realize.

Previously, large investors have stayed clear from the crypto-investing space due to the high volatility of the key currencies. As Bitcoin and Ether prices have seemed to reach certain equilibrium this year, more and more traditional financial institutions have started diversifying their portfolios with crypto assets.

But considering the current demand, large institutional investors will not stay away from launching dedicated crypto-investment products for much longer.

“Legislative changes regarding financial products are bringing in more transparency and legitimacy to the crypto-trading space.” -Hayato Terai, Co-CEO of G8C token-issuing GanaEight Coin Ltd., a Ganapati Group company.

The fintech and crypto expert of PwC China, Henri Arslanian, recently forecasted on Twitter that more big banks would reveal crypto projects this 2019.

Goldman Sachs Group was the first investment bank to offer a bitcoin trading product to its clients. At the beginning of November, the company started onboarding a small number of clients to test their new crypto trading desk, which allows trading bitcoin non-deliverable forward contracts.

Arslanian believes that despite unpredictability in regulation and crypto bear market, many financial institutions would enter cryptocurrency. He also mentioned Fidelity investments as an example of 2018 crypto market entry. Many of these financial institutions that will roll out on cryptocurrency this year are many major banks that can offer crypto-custody services for its banking clients.

In an interview with Bloomberg, he said that companies may try to collaborate with other companies, for example, Nomura partnering with Ledger. While some others may try to invest in crypto firms like Circle and BitGo. These kinds of activities, according to Arslanian, would bring about the institutionalization of cryptocurrency.

According to Brian Armstrong, CEO of CoinBase, “It is likely that institutional investors would use a service like Coinbase Custody to secure their crypto assets, providing layers of nearly impenetrable protection through the use of unique verification techniques.”

A lot of opportunities will open, and great businesses will develop in 2019, according to Greg Tusar, a former head of electronic trading at Goldman Sachs. The CEO of Circle, Jeremy Allaire, fearlessly forecasted that Bitcoin will worth much more than it’s worth today.

Many crypto experts believe that major banks need to start using crypto just like the institutional exchanges such as Switzerland’s SIX. Swiss-based SIX entered more directly into crypto trading and became the first institution to be recognized as a crypto-based-exchange-traded fund (ETF).

In 2019, it can be expected that many financial institutions and banks would embrace crypto’s underlying blockchain technology.

Clearly, institutional investors are growing their tech-muscles to accommodate more crypto-trades. They can offer fresh inflow of capital and can propel the development and adoption of new frameworks for cryptocurrency. Ultimately, this can add legitimacy to the crypto trading industry and can push markets further. Unlike individuals, financial institutions are largely restricted in their abilities to manipulate the markets on a large scale. So, their active presence may actually contribute to more stable prices. However too early, the participation of many institutions sets a new major milestone for cryptocurrency.

Trading in cryptocurrency (digital currencies, ICOs, tokens) is trading in a lot of uncertainty and different variables need to be kept in mind.

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