Imagine that an institutional investor such as an insurance company or a pension fund decides that they want to experience the water in cryptocurrency. Or maybe a large company wants to buy bitcoin (BTC) to diversify its assets from the treasury. One thing they are unlikely to do is announce their intention in advance, as this may increase the price of the digital asset they are trying to buy.
As such, there is often a gap between the actions of a large institution – such as the purchase of bitcoins worth $ 100 million – and its public announcement about it. “Institutional participation flows cyclically,” Diogo Monica, co-founder and president of cryptocurrency bank Anchorage Digital, told Cointelegraph. “When you hear about a new company adding cryptocurrencies, we’ve usually talked to them for months.”
Did something like this happen during the last price increase – when Bitcoin, Ether (ETH) and many other cryptocurrencies reached all-time highs? Have companies and institutional investors secretly hijacked cryptocurrencies in the early fall – so as not to raise prices while in the escalation stage – with their influence just this week?
Why are the biggest investors?
“Institutions have certainly recently started or increased their bitcoin distribution,” Kapil Rati, CEO and co-founder of CrossTower, an institutional cryptocurrency exchange, told Cointelegraph. He admitted that much of this could have started in early October, as large investors probably tried to recover before the launch of the ProShares Exchange Traded Fund (ETF) – and then become a seller after the launch – but still “there was strong downward support that kept these prices down. This procurement support looked more like institutional lag than retail procurement as it was implemented. ”
James Butterfell, investment strategist for the digital asset platform CoinShares, warned that the company’s data is purely anecdotal – “we can only trust institutional investors to tell us if they bought our ETPs” – but “we see growth A number of mutual funds continue to discussing the possibility of adding bitcoins and other cryptocurrencies to their wallets, he told Cointelegraph, explaining:
“Two years ago, the same funds thought bitcoin was a crazy idea; a year ago we wanted to discuss this further; and today they are increasingly worried that they will lose customers if they do not invest.”
Butterfly added that the rationale for initial investment “appears to be diversification and monetary policy / inflation hedging.”
This commitment may not necessarily come from more traditional institutional investors such as pension funds or insurance companies, but is shifting more towards family offices and trust funds, according to Lennard Neo, research manager at Stack Funds, “but we are seeing an increase in appetite risk and interest, especially for certain sectors. crypto – NFT, DeFi, etc. – and broader mandates beyond just Bitcoin. “He told the Cointelegraph that Stack Funds receives two to three times as many inquiries from investors as it did at the beginning of the third quarter.
Why is there an obvious increase in institutional interest? New said there are many reasons, from “speculation to those who want to hedge against global macro uncertainty.” But many have recently stated that they have seen “blockchain and cryptocurrency become an integral part of the global digital economy”.
Freddy Zwanzger, co-founder and data director of the blockchain data platform Anyblock Analytics GmbH, noticed some fear of missing something, or FOMO, who played here, and told Cointelegraph: “Where has the investment in cryptocurrency for executives been in the past? “it can happen. Wrong – now it is becoming increasingly risky not to even allocate part of the wallet to cryptocurrencies, as stakeholders will have examples from other institutions that have allocated and received significant benefits.”
Zwanzger suggested that the fact that large financial companies such as Mastercard and Visa began to support cryptocurrencies on their networks and even buy non-perishable tokens has only strengthened FOMO.
“The interest from institutional investors and family offices has gradually increased over the year,” said Vladimir Vishnevsky, director and co-founder of St. Gotthard Fund Management AG. “The approval of the BTC ETF in October only exacerbated this trend as it is now a much easier way to make money.” Fear of inflation is high on the agenda of many institutional investors, and “cryptocurrencies are seen as a good defense against this along with gold.”
Public companies that study cryptocurrency for their balances
What about companies? How many people have bought bitcoins and other cryptocurrencies for government bonds?