Since Bitcoin’s emergence in 2009, the sheer myriad of cryptocurrencies available has continued to proliferate. While some believe this saturation is negative for the mass adoption of cryptocurrency, BitGo's CTO, Benedict Chan, thinks it could be good for the market. 

Speaking to Bloomberg, Chan referred positively to the highly saturated crypto market.

Having a consolidation of developers and talent, going towards strong projects could be a good thing for the entire industry.

Interestingly, sharing this sentiment is Anthony “Pomp” Pompliano the bitcoin bull and co-founder of Morgan Creek Capital. Pomp highlighted the net positive impact of the ever-expanding range of cryptocurrencies within his theory on token density. 

In essence Pomp’s theory goes that the more saturated with sound projects the market becomes, the more users it will draw in. Using Facebook’s Libra as an example Pomp explained this model further:

Based on the Token Density Theory, Libra is likely to create an influx of users for Bitcoin and other tokens if it successfully launches. Additionally, it wouldn’t be surprising to see other large technology companies create their own tokens, which would further increase the positive effect on existing tokens.

Price consolidation

Chan also spoke on a different kind of consolidation, this time pertaining to the price of bitcoin and the wider cryptocurrency market. Bitcoin has been relatively stagnant as of late, ranging between $10,000 and $11,000 for the past few months. Chan suggested that the current range the cryptocurrency stuck within may only be broken with the upcoming BTC halving. 

Chan notes bitcoin’s habitual tendency to range for extended periods of time, alluding that only the strongest of catalysts will allow the trend to break upward. 

May 2020, the proposed date of the next bitcoin halving, could bring this much-needed price boost, says Chan; citing the time-honored principle of supply and demand:

Today the bitcoin supply is being added to at a rate of 12.5 [BTC] every 10 minutes, and next year that amount will halve to 6.25 [BTC] … So there'll be less supply of bitcoin that is actively being minted and entering the market.

Institutional Integration 

The conversation digressed to talk of the obstinate holy grail that is, institutional involvement. Answering a question relating to BitGo’s own institutional engagement, Chan suggested that while institutional interest has been rising over the past few months, genuine tangible involvement is still lacking, noting that institutions are “yet” to buy-in.

Instead, according to Chan, they’re waiting for proper financial infrastructures, such as effective crypto custody, margin lending capabilities and a larger pool of liquidity.

Indeed, with imminent the launch of Bakkt on 23 September, the wishes of these institutions will be soon answered; and then perhaps we will see if institutional investors are truly interested in the cryptocurrency industry.

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