Institutional investors are coming back to the cryptocurrency markets. It comes as bitcoin enjoys a rebound from which some observers believe is due to the serious money that is being injected on the cryptocurrency. In December 2017 bitcoin was selling at the peak of $20,000 before plummeting by a half its value than further declining steadily.
The most significant gain made by bitcoin recently has been about 16.9 percent when prices surpassed both $7,000 and the $8,000 marks in just less than one hour. Bitcoin researchers assert the gain in the price of bitcoin is fueled by the influx in the number of new bitcoin payment application, tax-related selling almost over and speculative investors being kicked out of the market.
Mr. Jeffry Van Leemput, an analyst, working for Cryptocampus confirmed that serious money is now getting its way to the bitcoin market. He further stated that he recently helped set up a $200,000 bitcoin transaction for some Chinese buyers and some very wealthy individuals. Many investors have been watching bitcoin to surpass the $8,000 before they could rally support by pouring large sums of money on the cryptocurrency.
Bitcoin is a Lucrative Response to Mainstream Market
According to cryptocurrency analyst Jacob Pouncey of Saxo Bank, the recent advertising bans and the corresponding regulatory actions against cryptocurrency is a significant threat for the continuation of the Bullish momentum. However, Mr. Pouncey was quick to acknowledge that there still a very high possibility of a comeback.
Jacob Pouncey believes that the increase of uncertain sentiments in the legacy markets may drive up the demand for bitcoin and some other assets that may not be correlated with the mainstream financial among institutional investors. Mr. Pouncey statement on bitcoin is transcribed as;
“Any significant Pullback in the equity markets will warrant an inflow of money into uncorrelated assets or assets that are not covered by the traditional financial system with cryptocurrency as potential alternatives. The increase in the number of institutional investors in cryptocurrencies which has been due to increase in regulation and investors protection could lead cryptocurrency to a positive quarter.”
Institutional Investors Being Held back by the Lack of Regulation of the Cryptocurrency Industry
According to Adrian Lai, co-founder of a Hong Kong-based cryptocurrency investment firm Orichal partners, the lack of clear and compelling regulations in the cryptocurrency markets is the primary obstacle to the inflow to institutional investors’ money to the cryptocurrency markets. Adrian voiced his concern in a statement saying,
“No one is trying to ban the development of cryptocurrencies; Regulators are making initiatives to better regulate the cryptocurrency market which will help the industry mature. When the regulation position on cryptocurrencies are clear, large funds will be more assured and willing to commit significant capital into cryptocurrencies.”