Dan Held, Kraken’s growth lead, has revealed in a series of tweets that institutional investors betting on bitcoin could lead to a “more intense” bull market, and milder bear markets than the ones we’ve seen before.
In his tweetstorm, Held started by clarifying that “institutions” in the cryptocurrency space refers to financial institutions such as banks, corporations that provide services as intermediaries of financial markets, hedge funds, and corporations.
Over the last year, he added, a “herd of institutions” have been started moving into bitcoin. Macro traders including Paul Tudor Jones, Bill Miller, and Guggenheim have all said positive things about bitcoin and even bought the cryptocurrency. Investments banks, which “scoffed at Bitcoin over the years,” are now entering the cryptocurrency space.
As reported, Citibank has said bitcoin has the potential to become the “currency of choice” for international trade, while a report by Deutsche Bank has revealed bitcoin became “too important to ignore” with its $1 trillion market capitalization.
Similarly, corporate adoption surged last year after PayPal launched a new feature letting users buy, sell, and hold crypto. Since then MicroStrategy has invested over $2.2 billion in bitcoin, while Tesla bought $1.5 billion and started accepting bitcoin as a payment method.
Held added that institutional adoption is important because without it bitcoin “would be relegated to being a niche asset adopted and held by individuals who have little to no influence over global finance/politics.” He added that s bitcoin “becomes more widely recognized as a store of value, it become further ingrained in our world.”
The Kraken executive added institutions manage $100 trillion worth of assets and “some of that is flowing into bitcoin.” As they buy BTC, the availability of coins out there to purchase drops. Looking at Coinbase’s S-1 filing, he noted institutions started moving in in the second quarter of 2019, and have been ramping up their volume ever since.
Held concluded it’s possible that institutional adoption could give “rise to a bull market that is more intense than previous ones, and/or a more mild bear market.” Bitcoin, he said, is now globally recognized as a store of value asset, a “monumental achievement in its adoption process.”
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