Cryptocurrency Market Sees An Increase in Institutional Investors

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cryptocurrency 3423264 1920
cryptocurrency 3423264 1920
  • Institutional investors have shown interest in the crypto market and have invested large amounts of stakes in Bitcoin, Ethereum, and so on.
  • According to the Fidelity survey, as many as 36% of institutional companies and investors own digital assets.
  • Out of 36% of investors, 25% have holdings in Bitcoin and 11% have in Ethereum.

The cryptocurrency market is experiencing rapid growth day by day. Over the past few years, we had seen that only a handful of retail enterprises invested in cryptocurrency. But now the crypto market is seeing a variety of investors ranging from banks, many insurance companies, and of course, asset managers. They have shown interest in the crypto market and have invested large amounts of stakes in Bitcoin, Ethereum, and so on.

According to the Fidelity survey, as many as 36% of institutional companies and investors own digital assets, cryptocurrency. However, Bitcoin still the most popular cryptocurrency as out of the 36% of the investors, 25% have their holdings in Bitcoin, while the second place is obviously, Ethereum with 11% asset holders. 

Tom Jessop, who is the president of the Fidelity Digital Assets, asserts that these results confirm a trend we are supposed to see in the cryptocurrency market as this marks the greater interest in and acceptance of digital assets. It means people are starting to acknowledge the benefits of investing in Bitcoins rather than investing in the same old conventional paper currency. 

Institutional Investors Moving towards Cryptocurrency Market

Surveys point out that most investors are from Europe and followed by them on the second number in the USA. Now people might be wondering why Europe is the top contributor in the market. And right now, we simply cannot ignore the situation around us. A global pandemic has crippled almost every country’s economy. Some countries are on the verge of giving negative interest rates, and some countries are actually doing it. In the current scenario, people are often tempted to invest in cryptocurrency rather than in banks. 

If we think on a different level, the question will be why only ‘36%’ of the institutional investors are investing in crypto? Why not more? It is because of the high volatility of the cryptocurrencies. Some investors find it quite unsafe to invest in something which is unsure and faces high fluctuations in the market.

Some analysts say that the crypto market may crash, whereas some suggest that it won’t. For investors, it becomes complicated to choose between the uncertainties. With the growing interests of different institutions, the management risks and regulatory requirements also increase.

Many investors do not find them bankable and consequently step back from investing. However, the market has been favoring the blockchain companies. There has been a steady rise of the investors in the past few years.

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