Could Institutional Investors Hold The Keys To The Next ”Bitcoin Moon”?

Could Institutional Investors Hold The Keys To The Next ”Bitcoin Moon”

A recent Forbes article by the seasoned journalist Kenneth Rapoza makes the case that a sudden upswing in the price of Bitcoin depends on a potential influx of institutional investors. Specifically, Rapoza makes the case that this might be coming sooner rather than later.

Rapoza suggests the price of Bitcoin could be significantly boosted by institutional capital

Rapoza starts his Forbes piece by recounting the numerous Bitcoin price predictions making the rounds. Whilst some argue that Bitcoin is headed towards $14,000, more bullish predictors – such as ThinkMarkets’ strategist Naeem Aslam – suggest that the premier cryptocurrency could reach a price level of $50,000 as soon as this coming December.

Moreover, Rapoza also highlights how other suggestions are in a league of their own. For example, the permanent cryptocurrency bull Tim Draper has notoriously predicted that Bitcoin will reach a price level of $200,000 by 2022.

At the moment of writing the price of Bitcoin is hovering slightly below the $3,900 barrier. As such, these predictions represent massive price increases. Although Bitcoin has experienced immense price hikes in the past, these predictions all hinge on the possibility of institutional capital entering the cryptocurrency markets.

It is widely recognized that the main barrier to this is when the US Securities and Exchange Commission (SEC) decides to approve a cryptocurrency-based exchange-traded fund.

Rapoza argues that this could be one of the main drivers of the next ”Bitcoin moon” along with imposing market-friendly cryptocurrency regulations. As Rapoza puts it in his recent Forbes article:

”Once Bitcoin is regulated as a security, when institutional investors follow in the footsteps of high-net-worth individuals and hedge funds already in crypto, then this market goes to the moon.”

Universities, institutional investors and millennials are all reportedly intrigued by cryptocurrency investing

Furthermore, Philip Owrutsky – a strategist for Acadian Asset Management and a cryptocurrency skeptic – admits that institutional representatives are currently examining the potential of cryptocurrency investments.

”I’m not convinced Bitcoin eventually becomes the lead, global currency. And I’m not convinced that institutional money is going into it. But they [institutions] are inquiring about it, that’s for sure.”

”You already have professors looking at how to value cryptocurrencies like a traditional security,” Owrutsky noted. This suggests that the asset and investment management divisions of US universities are already eyeing cryptocurrency investments.

Universities alone could bring a massive capital influx to the cryptocurrency market, and could be realized as soon as the asset class becomes more institutionalized. However, the general public could also bring substantial capital to the cryptocurrency markets.

A recent survey, conducted by the Newport Beach blockchain and cryptocurrency investment firm Sustany Capital, reportedly found that 88% of millennials intend to buy cryptocurrency as they consider it a good investment.

Furthermore, Bitcoin still has a lot of room to grow. The premier cryptocurrency is oftentimes likened to ”digital gold” but it is – as of yet – nowhere near gold in market size.

Niklas Nikolajsen, the co-CEO and chairman of the Swiss cryptocurrency broker Bitcoin Suisse, has noted this.

”Bitcoin used to be immeasurable in market size, but is now about 1% of the gold market – a traditional hedge against [fiat] currency – and 1% of the multi-trillion-dollar gold market is not a small thing.”

Moreover, the fact that Bitcoin – which is arguably far more flexible than traditional gold – only amounts to around 1% the value of the global gold market should certainly be an interesting detail for those who believe Bitcoin is overvalued.

Leave a Reply

Your email address will not be published. Required fields are marked *