Most of the asset classes are heavily dominated by the institutional investors. Whether you’re speaking about equity or whether you’re speaking about the real estate market, most of the institutional investors have large holdings. However, according to the founder of Pantera Capital, Dan Morehead, Bitcoin is not owned by institutional investors.
When you look at the number of institutions who are investing in Bitcoin, you would find that it is actually on the lower side.
According to him, the average age of the bear market in Bitcoin is just 71 days. In that regard, currently, we are around the 50th-day mark. By this standard, you can be sure that more than half of the cryptocurrency bear phase is already over. This is an opportunity for the investors who are looking to hold Bitcoins for a longer period of time. This explains that the Bitcoin bear phase would not actually last for a longer period of time. The quantum of the Bitcoin bear phase is actually pretty severe at this time around. It is fallen around 60% from the peak. This is actually scaring investors away as most of the investors are accustomed to just 10% to 20% fall in the asset prices.
That is why investors are not sure exactly what they should be doing.
High institutional interest:
With the recent fall, more and more institutions are looking to invest in Bitcoin. The reason for this is that they understand that there exists an opportunity after the recent fall. When any asset falls by around 60%, it can give rise to enormous opportunities. Same is the case with Bitcoins.
Moreover, the market cap of Bitcoin is large enough for the institutional investors to invest in it. Also, institutional investors are getting more and more inquiries from their customers regarding investment in Bitcoins as well as other cryptocurrency assets. This is another reason why they are looking to invest in cryptocurrencies.
One thing which the investors are actually fearful about is the increased volatility. It is common for Bitcoin as well as other cryptocurrencies to move 10% or 20% in either direction within a period of 24 hours. This is the reason why institutional investors are not investing a significant amount of money in Bitcoin or any other cryptocurrency asset.
It remains to be seen whether, in the future, the institutional investors actually take the initiative of investing significantly in the cryptocurrency stay away from the cryptocurrency due to the increased volatility. Source: bitcoin.com
Adam Webb is editor in Smartereum, blockchain and currency news, where he produces updates on Blockchain, Ethereum and other alternative cryptocurrencies.