2020-6-25 11:06 |
An institutional adoption remains key for the price of Bitcoin to conquer new heights. Without it, Bitcoin will remain in the hands of a group of ‘small’ investors as like as a number of whales – who, however, can exert higher influence on the BTC price.
Messari, crypto research, and market intelligence expert firm shared an insight through its research analyst, Ryan Watkins, about the potential Bitcoin price upraise if institutional investors get into the field.
According to Watkins, if these organizations decide to allocate “a low single-digit” 1% of their portfolio into Bitcoin investment, this may result into large amount of cash flooding in and bringing up the price to an unprecedented level of $50,000.
What would it look like if institutional investors followed Paul Tudor Jones and allocated a “low single-digit percentage” to #Bitcoin?
Here’s what we found using our best estimates of global inst. investor AUM.
TL;DR?
Hundreds of billions if not trillions $ in inflows
1/ pic.twitter.com/mk6lEiI0UE
The likelihood of such a scenario increases as it already took place in the past, when Bitcoin went sharply up in December 2017 and recorded an unbeaten till now price level of $20,000. The common theory says that this was an effect of institutional investors, which makes it likely to repeat again if some financial industry players decide to engage and make a share of contribution to their portfolios with Bitcoin.
However, the nature of volatility scares off many major institutional players, especially when it comes to an active portfolio of their clients. Thus, a month ago, a major American investment bank Goldman Sachs labeled Bitcoin as a risky investment option that would wreck their clients due to its price unpredictability. This scepticism echoes across the industry, when many banks are not eager to take responsibility for the highly uncertain behaviour of cryptocurrency.
What’s in store for Bitcoin?If Bitcoin gets accepted on a major scale, as Watkins outlines in his hypothesis, the total market value of Bitcoin may cumulatively result in $1 trillion. Whereas it is still hard to say which institutions will be on the frontline of innovation adoption, it is quite possible that the retirement sector will want to make its footprint first, since adult customers who already now start to think of their retirement have good familiarity with the concept of cryptocurrency and are willing to place a share of their funds into digital portfolio.
Besides, another theory may be that the token sector on its own will enlarge in size and competitive pressure, which will make new types of digital finance organizations – the like of which are Bitcoin ETFs – to spur investment into crypto coins. As consumers are getting more aware of the benefits and opportunities of investing in crypto assets, this will also prompt a higher organizational engagement in this field within the upcoming years.
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