It would seem that cryptocurrency is currently stabilizing and undergoing ”professionalization”, at least according to a fresh Bloomberg interview.
More specifically, these statements stemmed from a talk Bloomberg had with the Global Head of Trading at Cumberland, which is DRW Holdings’ cryptocurrency investment and trading division, Bobby Cho.
Cho noted that the cryptocurrency market is now ”turning a corner” towards increased professionalism – after having spent a number of years on the fringe of mainstream accepted technologies, which Cho referred to as ”Wild West” years.
In relation to the increased stability and continuity in the market, Cho stated that ”what that’s showing you is the professionalization that’s happening across the board in this space”.
The last month has seen the price of Bitcoin grow notably more stable, and the Bloomberg piece noted that this development is symptomatic of the growing maturity of the cryptocurrency sector as a whole.
For example, cryptocurrency miners are now no longer hoarding coins hoping to sell these during market rallies. Rather, they have begun to schedule frequent coin sales, meaning that large amounts of coins will not suddenly flood the markets – which is something that could significantly influence the day-to-day price of Bitcoin.
Specifically, Cho stated that this showed that ”the Wild West days of crypto are really turning the corner”, as the volatility of Bitcoin has begun to decrease dramatically.
Furthermore, Cho noted that the last four to six months have seen the markets trade in a notably tight range. In addition to this, trading within this narrow range ”seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space”.
Cho’s comments come during a time when several institutional actors are rumored to be developing cryptocurrency products, such as Morgan Stanley, Goldman Sachs and Intercontinental Exchange.
Whilst it is unknown whether institutional giants are ready to fully embrace cryptocurrencies, it is worth stating that reduced volatility is an important prerequisite for this to eventually take place.
Institutional actors prefer sectors with comparatively low long-term volatility, and seeing Bitcoin become less susceptible to bullish or bearish news in inter-day trading could therefore be an important step towards institutionalization.
It should also be noted that the Bloomberg piece comments on the prospects of a Bitcoin, Ethereum or other cryptocurrency-based exchange-traded funds (ETF).
Cryptocurrency experts are reportedly more or less in agreement that an eventual cryptocurrency ETF is either unavoidable or unstoppable, depending on how you view the financial product.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.