Good post though. Blockchain technology has been in a rapid growth all over the world for its privacy and other key features. It has taken over a spot in "Top 5 technologies which could rule the world in future" and lots of huge multinational organisations such as IBM and Accenture are adopting them for various reasons. Most of the banks are going to adapt themselves to blockchain and the cryptocurrencies in the near future. Bitcoin has been considered by many to be digital oil which would revolutionize the future world.
Right now many people considered the cryptocurrency as unregulated scheme which might bump and dump at anytime in future. This thoughts would go away once when large mnc's accept crypto as a mode of payment and many countries start using them. Nowadays the awareness of crypto around the world is not too good, but it might increase once when countries start accepting them. If all these factors come to existence, the volatility of the crypto would be minimal and would diminish in future.
Topic: Professional and Institutional money are flowing in. What does that mean for us? (Read 155 times)
April 08, 2018, 10:12:36 AM
April 08, 2018, 07:33:42 AM
Many of us are probably aware of big institutions and corporations moving into blockchain and crypto. For example, most of big exchanges are largely owned by large corporations. Korbit is largely owned by Nexon. Upbit is owned by Kakao. In addition, Circle, which is funded from investors like Goldman Sachsm bought Poloniex. And recently, Korean investors bought Bitstamp for 400 million dollars.
We also see many professional funds especially venture funds investing in cryptomarket and even mining operations. And ironically, we are also seeing famous fund managers moving into crypto. Even George Soros, who criticized Bitcoin as “nothing but bubble” is planning to build a cryptofund.
Ok, so that’s great. But what does that mean for us?
1. The cryptomarket will be more mature and professional
Just like how the market for stocks and commodities like oil became more established and professional after they became “mainstream.” The cryptomarket is likely to go through a transition where we will have a lot of professionals in this field. This means that many of us who are knowledgeable about cryptomarket will be in high demand especially if we already have other valuable skills such as coding, marketing, and analyzing.
2. The prime information will be a key to success
Right now, the marketcap for cryptos are small. However, once we have billions of dollars’ worth of crypto trading, the prime information such as listing and technological breakthrough will be very valuable. Therefore, in order to get these information, the big players would be willing to spend a lot of money. Of course, we will also see regulators trying to crack down on them but just like stocks, it would be impossible to stop all of them. This also means many institutions are going to want more information than just simple technical analysis and looking at charts. Like Bloomberg terminal, they would want to have all sorts of information.
3. The price of leading cryptos might increase.
The reason why I point out “leading cryptos” instead of “all cryptos” is because right now most of investment and altcoins can be purchased via few cryptos such as Bitcoin, Ether, and NEO. So these major coins are likely to get major boost from the capital inflow. Of course, several smaller projects will get major boosts as well but it’s likely to be more selective. It’s important to remember that most of big trades happen via dark pool because usually exchanges can not handle them at once. In theory, a demand for a billion dollar worth of Bitcoin should spike up the price, but it might not happen right away if they trade via darkpool and OTC rather than exchanges
4. Arbitrages will be smaller
If you use decentralized exchanges like ForkDelta or IDEX, you are probably aware of large spreads and large price differences between exchanges. However, as more capital flows in, arbitrages between exchanges is likely to get smaller because in theory, the market becomes more efficient as it becomes more liquid. Of course, Kimchi Premium is likely to continue because Korean exchanges require extra hurdles (such as you have a Korean nationality to use it)
We also see many professional funds especially venture funds investing in cryptomarket and even mining operations. And ironically, we are also seeing famous fund managers moving into crypto. Even George Soros, who criticized Bitcoin as “nothing but bubble” is planning to build a cryptofund.
Ok, so that’s great. But what does that mean for us?
1. The cryptomarket will be more mature and professional
Just like how the market for stocks and commodities like oil became more established and professional after they became “mainstream.” The cryptomarket is likely to go through a transition where we will have a lot of professionals in this field. This means that many of us who are knowledgeable about cryptomarket will be in high demand especially if we already have other valuable skills such as coding, marketing, and analyzing.
2. The prime information will be a key to success
Right now, the marketcap for cryptos are small. However, once we have billions of dollars’ worth of crypto trading, the prime information such as listing and technological breakthrough will be very valuable. Therefore, in order to get these information, the big players would be willing to spend a lot of money. Of course, we will also see regulators trying to crack down on them but just like stocks, it would be impossible to stop all of them. This also means many institutions are going to want more information than just simple technical analysis and looking at charts. Like Bloomberg terminal, they would want to have all sorts of information.
3. The price of leading cryptos might increase.
The reason why I point out “leading cryptos” instead of “all cryptos” is because right now most of investment and altcoins can be purchased via few cryptos such as Bitcoin, Ether, and NEO. So these major coins are likely to get major boost from the capital inflow. Of course, several smaller projects will get major boosts as well but it’s likely to be more selective. It’s important to remember that most of big trades happen via dark pool because usually exchanges can not handle them at once. In theory, a demand for a billion dollar worth of Bitcoin should spike up the price, but it might not happen right away if they trade via darkpool and OTC rather than exchanges
4. Arbitrages will be smaller
If you use decentralized exchanges like ForkDelta or IDEX, you are probably aware of large spreads and large price differences between exchanges. However, as more capital flows in, arbitrages between exchanges is likely to get smaller because in theory, the market becomes more efficient as it becomes more liquid. Of course, Kimchi Premium is likely to continue because Korean exchanges require extra hurdles (such as you have a Korean nationality to use it)
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