In the past week, every cryptocurrency website, blog, and trader was raving about massive investments from Harvard, MIT, Yale, and other popular universities in the United States. But the question on everyone’s mind is - why does this matter?
What's all the fuss about?
Every article posted on popular crypto news streams used the term “Institutional Investment” when referring to the investments made by Harvard, MIT and the likes. An “Institutional Investment” refers to investments made by large, well-renowned institutions, like larger firms, and academic institutions.
The fact that this term is used to refer to crypto-investments is huge for the legitimization of the crypto-sphere.
Why are they investing?
If you think cryptocurrencies are volatile, you probably haven’t dealt with the real market, or maybe you’re just unaware of cryptocurrency.
The lack of correlation between major digital assets and the broader financial market allow cryptocurrencies to operate as robust and reliable stores of value, especially in a time of economic uncertainty!
By investing in crypto, Harvard and MIT are adding risk-reduction assets to their portfolio, or at least less risky assets than many on the fiat market.
Why does this matter to me?
As someone who invests in cryptocurrency, this should say a lot to you about the future of the market.
When large institutions make investments, first and most importantly this triggers FOMO (Fear Of Missing Out) in other institutional investors. As more and more institutions invest in cryptocurrencies, it will lead to fewer entities holding a larger portion of total currencies. This, most importantly, will bring stability to the market.
Why hasn't it made an impact yet?
The Bitcoin has bottomed out, and the rise will come, these institutional investments will be the building blocks of the next bull run.
Spencer Bogart (@CremeDeLaCrypto on Twitter) on CNBC’s ‘Fast Money’ agrees, stating that the market will change, but in the midterm. Spencer also claimed on ‘Fast Money’ that Bitcoin ends the year> $10k.
What do other people say?
Bobby Cho, head of trading at Cumberland, which handles OTC trading for cryptos said: “What that’s showing you is the professionalization that’s happening across the board in this space, The Wild West days of crypto are really turning the corner.”
Cho also said that the recent stagnation of cryptocurrency prices could be due to traditional financial institutions becoming more comfortable diving into the space.
“The institutionalization of this space is coming. It’s coming pretty quick.” - Mike Novogratz – a billionaire hedge fund manager that started a $500 million hedge fund focused on cryptocurrencies.
Everyone important in finance seems to agree - crypto is changing, and for the better.
In conclusion: Established players are here to invest. Even if absolutely nothing happens to prices, this new entry into the crypto-sphere brings with it a higher degree of legitimization. As large firms invest, the crypto market will need to be more regulated leading to more governments accepting it. FOMO and heightened regulations will bring even more to this complex, yet highly rewarding and practical asset.
Now, with prices down, and the future bright, we really are living in the best times to be in crypto.
Disclaimer: This post is an Opinion Editorial by Harshvardhan Sharma. The views expressed here are solely the writer's and CoinDCX takes no responsibility for the claims and opinions expressed here.