Wall Street comes to Bitcoin: here's why the institutional crypto market just saw a massive turning point
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Things have accelerated today as a Bitcoin derivatives platform, Deribit announced full integration of ClearLoop custody and settlement solution for institutions.
ClearLoop is a London creation. Copper, led by the CEO, Dmitry Tokarev, who commented:
"ClearLoop, the result of this collaboration, allows investors to settle transactions instantly, keep their assets securely in the custody of third parties, eliminate self-preservation issues, while eliminating the risk of consideration and associated limitations. with volume. "
Without a doubt, a safe and frictionless off-chain preservation solution represents a major turning point for institutional investors.
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Previously, asset managers had to transfer cryptography from their secure cold storage portfolios to hot wallets during the trade to establish and trade. Not only can it take a long time, but it increases the level of risk as a result.
ClearLoop and Cooper's external custody solution reaches an agreement in seconds. This has the potential to revolutionize the structure of the crypto derivatives market, leading to greater institutional adoption.
Institutional money dominates Bitcoin volume
Whether we like it or not, institutional money accounts for a significant portion of the volume in the Bitcoin market. This trend will only increase as crypto assets are starting to flow through the main investment stream.
Analysis of data from Blockware solutions shows that the volume of CME on December 17 was negligible compared to retailers via Coinbase and Bitfinex.
However, CME volumes have gradually increased over time. So much so that the volume of CME overshadowed that of Bitfinex and Coinbase for the first time in February 2019.
Blockware Solutions has brought this down to 2019 lows with crypto markets, which saw Bitcoin at $ 3.2K, which is a strong signal to buy institutional money.
This trend continued for three consecutive months, until May 19. But on June 19, he saw FOMO retail investors at $ 14,000 Bitcoin, creating an increase in retail volume.
Anyway, data from the last three months until January 2020 shows that the volume of CME exceeds that of Bitfinex and Coinbase. January 2020 being clearly dominant on retailers.
Source: blockwaresolutions.com
It's just a matter of time
Of course, this only represents data from three platforms. There is still a general aversion to institutions when it comes to investing in Bitcoin.
There are many reasons for this. But it has a lot to do with the fact that institutional investors vary widely. The category includes family offices, foundations, pension funds, sovereign wealth funds, banks and insurance companies. All of them have different attitudes towards risk, especially risk within a volatile and emerging asset class.
The co-founder of decentralized exchange, Quick Laboratories, Richard Yan He explains that prerequisites such as keeping and insuring cryptocurrencies are a point of contention for many institutional investors.
Source: twitter.com
But thanks to Deribit and Copper, the infrastructure that directly addresses these concerns is now available to institutions.
As much as crypto-purists dislike this fact, it is only a matter of time before institutional volumes constantly exceed that of retail merchants.