{"id":12673,"date":"2023-01-22T16:32:11","date_gmt":"2023-01-22T13:32:11","guid":{"rendered":"https:\/\/alfacash.blog\/?p=12673"},"modified":"2024-02-19T21:49:59","modified_gmt":"2024-02-19T18:49:59","slug":"how-institutional-investors-crypto","status":"publish","type":"post","link":"https:\/\/alfacash.blog\/cs\/2023\/01\/22\/how-institutional-investors-crypto\/","title":{"rendered":"Takto vsadili institucion\u00e1ln\u00ed investo\u0159i na kryptom\u011bny"},"content":{"rendered":"

Until very recently, financial institutions viewed cryptocurrencies with skepticism. Satoshi Nakamoto<\/a> created Bitcoin to decentralize the economy, and banks weren’t big fans of the idea. But over time, traditional financial institutions began to recognize the benefits of blockchain technology. In fact, Bitcoin (BTC), Ethereum (ETH), and the rest of the crypto industry are becoming increasingly popular among institutional investors.<\/p>\n\n\n\n

The way in which institutional investors began to believe in crypto was radically changed by the Pandemie covid-19<\/a><\/strong>. Thus, today we see an institutional adoption that resists the crypto winter that the industry is currently facing.<\/p>\n\n\n\n

The beginnings of institutional adoption (2009-2014)<\/h2>\n\n\n\n

In the first years since the birth of Bitcoin, those who owned the cryptocurrency saw it as a promise of innovation in the financial sector and not as an investment vehicle. Microsoft<\/strong><\/a>, Paypal, Dell, Expedia, and Newegg were the pioneers in the institutional adoption of crypto<\/strong>.<\/p>\n\n\n\n

\"microsoft-institutional-investors-crypto\"<\/figure><\/div>\n\n\n\n

Despite this, in February 2014 the largest Bitcoin exchange in the world, Mt. Gox<\/a> filed for bankruptcy. This motivated the big players in the market to prefer OTC brokers to carry out their operations instead of exchanges.<\/p>\n\n\n\n

Therefore, in September 2014, TeraExchange received approval from the US Commodity Futures Trading Commission (CFTC) to create the first OTC product based on the price of Bitcoin<\/strong>. With this milestone, many more people were able to purchase Bitcoin through regulated OTCs.<\/p>\n\n\n\n

Likewise, in 2014 Ethereum developers published what would be one of the most successful ICOs, raising $18.30M. And it is that, although it was not revealed if the identity of the Ethereum whales were institutional investors, in 2019 it came to light that by 2016 only 376 entities owned<\/a> 47% of the ETH in circulation.<\/p>\n\n\n\n

Later, in 2015, Hyperledger<\/a>, an open-source project created by the Linux Foundation, was released. His initial goal was to support global business transactions for large institutions such as IBM, Intel, or SAP SE.<\/p>\n\n\n\n

The ICO boom (2017-2018)<\/h2>\n\n\n\n

It was in 2017 that crypto in general gained popularity, also among institutional investors. Thanks to the ICO<\/a> boom, Bitcoin rose from $1k at the beginning of the year and closed close to $20k in December.<\/p>\n\n\n\n

\"ico-boom-crypto\"<\/figure><\/div>\n\n\n\n

But, Bitcoin was still considered a dangerous asset back then. In fact, in March 2017, Forbes<\/a> dubbed the cryptocurrencies as ‘Blood diamonds’. With that name, they were referring to the fact that supposedly only drug traffickers and extortionists used Bitcoin. Likewise, the portal also indicated that the increasing value of the asset was due exclusively to these illicit purposes:<\/p>\n\n\n\n

…the only reason Bitcoin has value to anyone is because of the underlying value as a medium of exchange for lawbreakers. If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency.<\/p>Jason Bloomberg, Forbes.<\/cite><\/blockquote>\n\n\n\n

Likewise, in 2017, various industry players began to request the launch of spot Bitcoin ETFs. But, the SEC rejected<\/a> their proposals, claiming that none of the offers could disprove market manipulation.\u00a0<\/p>\n\n\n\n

Despite this, 2017 was an excellent year for institutional investors in the crypto industry. Therefore, CNBC hl\u00e1\u0161eno<\/a> that 124 crypto-funds have about $2.3 billion in total assets under management for October.<\/p>\n\n\n\n

2017 was also the launch of the Enterprise Ethereum Alliance<\/a>, comprised of a group of transnational companies from the energy sector (oil and gas) and the financial and software development sectors. This alliance sought to develop technology and applications on the Ethereum blockchain for the respective business activities of its members.\u00a0<\/p>\n\n\n\n

Among the founding companies were British Petroleum, JP Morgan bank, Accenture, Banco Santander, BBVA, Intel, ConsenSys, Thompson Reuters, and Microsoft<\/strong>.<\/p>\n\n\n\n

Pandemie covid-19<\/h2>\n\n\n\n

The COVID-19 pandemic marked a before and after for institutional investors in the crypto industry<\/strong>. To face the crisis caused by the blockades generated by the pandemic, the central banks initiated protocols to stimulate the economy, reducing interest rates to zero. In this sense, Bitcoin increasingly positioned itself as a refuge against inflation.<\/p>\n\n\n\n

\"investment-savings-bitcoin\"<\/figure><\/div>\n\n\n\n

Furthermore, another June 2020 survey<\/a> revealed that 36% of institutional investors in the US and Evropa<\/a> had become involved with crypto. And then in the second half of the year, many institutional investors such as financial advisers, family offices, hedge funds, and even foundations announced Bitcoin purchases.\u00a0<\/p>\n\n\n\n

Likewise, the 2021 bull run caused public pension funds and other large investors, notably insurance companies, to dive into the crypto industry.<\/p>\n\n\n\n

Despite its setbacks, cryptocurrencies have managed to convince many. Even some of those who have spoken out against cryptocurrencies in the past have changed their minds over time. The CEO of the business intelligence giant MicroStrategy, Michael Saylor, is one of them. In 2013 published a tweet in which he predicted a disastrous future for crypto. But, in August 2020, the company acquired<\/a> 21k BTC worth $250 million<\/strong>.<\/p>\n\n\n\n

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#Bitcoin<\/a> days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.<\/p>— Michael Saylor\u26a1\ufe0f (@saylor) December 19, 2013<\/a><\/blockquote>