Institutional interest in cryptocurrencies has only just begun

A growing list of mainstream financial institutions has continued to increase their exposure to cryptocurrencies over the past year.

The old adage that the cryptocurrency market is not for the faint of heart was recently brought to the fore when the sector’s total market capitalization fell to a relative low of $ 1.75 trillion on September 20, then recovered strongly. Yet despite all these fluctuations, demand from institutional investors remains strong, with reports suggesting that big players have continued to buy the downturn, especially following China’s latest blanket ban, which caused bears to take the plunge. control of the market, albeit briefly.

A recent report from CoinShares revealed that during the last week of September, digital asset investment products generated $ 95 million worth of inflows for institutional cryptocurrency investment products, with Bitcoin (BTC) and Ether (ETH) coming to the fore. head, with inflows of USD 50.2 million and USD 28.9 million, respectively. In fact, in the last 30-day period, entries on Bitcoin products have increased 234% on weekdays.

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It is also worth mentioning that, since April, the US investment bank Morgan Stanley has doubled the total number of Grayscale Bitcoin Trust (GBTC) shares it owns, something that came to light when the financial giant filed a report with the Securities Commission. (SEC) of the United States on September 27.

Lastly, investment management giant Ark Invest (led by CEO and cryptocurrency bull Cathie Wood) has also been on a GBTC buying frenzy, with the firm having acquired more than 450,000 GBTC shares through two different purchases recently, bringing his total loot to a hefty 8.3 million GBTC shares.

To get a better idea of ​​how active institutional players have been in terms of their exposure to cryptocurrencies, Cointelegraph contacted Luuk Strijers, commercial director of crypto exchange Deribit. He highlighted that large banks such as Morgan Stanley, Citi and Goldman Sachs are beginning to offer their clients a wide range of digital assets, adding:

“We still don’t see them being active on offshore derivatives platforms. However, we do see second-tier companies, asset managers, and hedge funds becoming more active, either actively investing / trading or alternatively hedging its investments in venture capital “.

To back up his claims, he pointed out that around 20% of Deribit’s option volume is traded today as an OTC block, whereas previously this figure hovered around the 5-10% range. “Due to the size of these transactions, which clearly involve institutional parties, these transactions are better executed in one block than in multiple on-screen transactions,” he explained.

 

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