This is the year that institutional money will come into the cryptocurrency market, thanks to the development of trading infrastructure, Tabb Group said on Tuesday.
The capital markets research and consulting firm’s senior analyst Monica Summerville and colleagues said in a report:
“If 2017 was the year cryptocurrencies went mainstream, then 2018 is certainly shaping up to be the year they go institutional.”
The market capitalization of all cryptocurrencies has halved from $800 billion in January to around $400 billion this month, according to CoinMarketCap.
Three main hurdles are regulatory uncertainty, lack of market infrastructure, and institutional-grade data sources — prevent institutions from participating in the cryptocurrency market at scale, the report said.
That has forced much of the institutional trading volume into over-the-counter trades, which ranges from $150 billion to $30 billion in daily trading volume, the analysts said, noting comparisons to the early ages of the now $5 trillion spot on the foreign exchange market.
The analysts said:
“But the newest technology providers entering this space are led by people from the wholesale financial markets who claim they have spotted a significant market gap waiting to be filled. The word on the street is that significant additional institutional money is being amassed and is waiting for the right conditions to enter the market — and expected to start doing so this year.”
With time Bitcoin has been adopted by many industries and governments. Even though a couple of years ago governments and industries were skeptical about the technology and believed it to be useless. Now it has great use and is promoting research on blockchain and cryptocurrency.
The Chinese government recently extended its research on blockchain technology and multiple online and offline stores that are now readily accepting Bitcoin and other altcoins as a mode of payment. The future looks bright for the cryptocurrency and the days of it being institutionalized don’t seem far away.
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