Role of Institutional Investors in Shaping the Future of Crypto Markets


“The year 2021 can be considered as the year of the institutional crypto investors. From MicroStrategy to Tesla, all dived in openly into the world of cryptocurrencies and started a new race that benefitted the whole cryptocurrency world. We shall too, dive deep into accessing the role of Institutional investors in the crypto paradigm.”

The Year of the Institutional Investors

The year 2021 was a bullish year for the cryptocurrencies and one of the major reasons for this bullish year was the mass adoption of the cryptocurrency industry by the institutional investors. The MicroStrategy bought Bitcoin on every dip in the market and currently holds the highest amount (121,044 BTC) by any institution. Tesla is expected to hold over 42,000 BTC and announced the acceptance of Bitcoin as a payment method to buy Tesla cars. El Salvador, accepted Bitcoin as a legal tender shaking the whole world. Various payment service providers such as PayPal, VISA, MasterCard started accepting various cryptocurrencies as the payment methods across their platforms making this an extremely eventful year for the industry.

The Role in Shaping the Future

The institutional investors invest a huge amount of money into an industry creating various opportunities. The following are the roles that these institutions are playing in shaping the future of the industry:

Market Stabilization

The cryptocurrency market is frowned upon due to its volatile nature and as more and more institutional investors enter the market, they tend to stabilize the market and the volatility is reduced. The institutional investors invest for the long term and thus stabilize the market in the process.

Builds Trust

As large institutions such as Tesla enter the crypto industry, it creates a sense of trust among the general investors regarding the technology and the future potential of the industry. As more and more institutions will adopt cryptocurrencies, more trust will be built. Adoption from the Governments such as El Salvador also heightens this trust.

Attracts Retail Investors

As more institutional investors join the party, the sense of trust that is created among the investors attracts more and more retail investors to invest. This has been seen throughout this year as the number of retail investors in the crypto sphere have increased dramatically. As more retail investors enter, more money flows into the market.

Pushes Innovation

With huge amounts of investments and partnerships by the institutional investors comes the opportunity of innovation in the field of cryptocurrencies. Various blockchains such as Ethereum and Cardano are partnering with real world companies to create services that will not only revolutionize blockchain technology but the whole world.

Creates an Environment for Regulation

The governments around the world were looking for an outright ban on the use of cryptocurrencies before the entry of the institutional investors. But as the institutional investors showed their interest in the technology, it made the governments review their decision and are now more inclined towards regulating the industry rather than a blanket ban.

Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.

Photo by – mohamed_hassan on Pixabay