Institutional Latest on the Market Expect the Bitcoin price roller coaster to end

As a result of the ongoing uptrend, many prominent institutions in traditional finance have tried to join the crypto train so as not to miss the ongoing action. Initially, an increase in open interest and Bitcoin futures trading volume has been observed in recent months. While this was to be expected, it may come as a surprise that the Chicago Mercantile Exchange, a global futures exchange, has recently become the world’s largest trading platform for Bitcoin futures.

In this sense, Data released by cryptocurrency analytics platform Bybt shows that CME accounts for $ 2.4 billion of the total of $ 13 billion in open positions in Bitcoin futures, closely followed by OKEx with $ 2.17 billion in the exchange ahead of others prominent players like Binance, Huobi and Bybit.

It’s no secret that the meteoric rise of Bitcoin (BTC) since December 2020 has increasingly caught the attention of investors around the world. To put things in perspective, despite the recent BTC crash that saw the price drop to just under $ 32,000, the coin is trading well above the $ 38,000 threshold again. – This corresponds to a 30-day net profit of around 95%.

Is institutional interest rising or stagnating?

Institutional Latest on the Market Expect the Bitcoin price roller coaster to end
Institutional Latest on the Market Expect the Bitcoin price roller coaster to end

The recent volatility has raised concerns about the sustainability of the current bull season and raised questions about whether institutional interest in Bitcoin is starting to stagnate. Konstantin Anissimov, chief executive of UK stock exchange CEX.IO, told Cointelegraph that it is important for newcomers to realize that the game is not just about institutions breaking the market, it’s about a decline. the risks:

“Unless something really drastic happens that can turn the entire market upside down – and I can’t think of anything that bad – there will likely be more large companies investing in Bitcoin and other cryptocurrencies in the future.”

Quinten François, host of the YouTube channel Young and Investing, believes that most of the institutions that wanted a part of the action have probably already found their way, adding that in such parabolic phases it is difficult to imagine larger wealthy ones Player Enter this room, at least until the end of the year, when things get more stable.

With that in mind, he added that most of the institutions that got on the cryptocurrency train are likely to pile up during the break-ins. If they stop, retailers’ money will slowly return to the market, adding to the value of BTC even further: “”They are smart money and they know what they are doing, they are not going to buy parabolic moves.“”

Jonathan Leong, CEO of the BTSE exchange, told Cointelegraph: “The institutional influx of cryptocurrencies has only just begun.” He added: “The rapid appreciation in prices for Bitcoin and other cryptocurrencies in the fourth quarter is directly related to this institutional entry or the expectation of such an entry“.

Will the institutions reduce market volatility?

It cannot be denied that Bitcoin is a much more mature commodity than it was in the 2018 bear phase, especially with regulations that have made significant strides in certain countries. In addition, the crypto market now has a significant number of professional exchanges and non-cryptocurrency companies participating in it.

According to Anissimov, these factors can go a long way in buffering Bitcoin’s volatility and increasing liquidity as a fixed asset: “Institutional investors are not so much key to driving Bitcoin’s bull run, but rather a way in which this market as a whole can calm down and become more stable and efficient.“.

However, when established institutions enter the crypto industry, they affect the price movement of most cryptocurrencies. Ultimately, this can help the entire industry, especially given that most traditional financial players are looking for long-term deals that can potentially protect Bitcoin from collapse, much like it did in the past 2018.

The recent moves are worth mentioning

Earlier this month, CoinShares, a European crypto-financing and exchange-traded company, joinedannounced This had successfully facilitated the trading of XBT certificates (Bitcoin) worth more than 2022 million dollars on the first market day of 2021. Specifically, the Bitcoin exchange traded securities provider is approved by the Swedish Financial Regulator and the company’s above offerings are currently available for purchase through Nasdaq.

According to CoinShares’ January 11th, Digital Asset Fund Flows Weekly report, $ 34.5 billion of equity will be held in crypto investment products as of January 8th. Bitcoin funds account for USD 27.5 billion or 80% of this, while USD 4.7 billion or around 13% is invested in Ether (ETH) products.

The report compares the performance of Bitcoin funds during this ongoing rally to that of 2017: “We saw much higher investor participation this time, with new net worth of $ 8.2 billion, compared to just $ 534 million in December 2017“.

Additionally, in a landmark decision last year, the Office of the United States Currency Auditor stated that domestic banks can protect crypto assets. That announcement was followed by another major breakthrough, with the OCC also stating that U.S. banks can even provide services to stable coin issuers, such as holding reserves.

Although some traditional institutions were already involved in this practice prior to the above decision, there was uncertainty in this area due to the lack of legal clarity. According to official clarification, stablecoins individually backed by fiat currencies in a bank’s reserves are not considered a risk in the US.

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