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Institutional investors in cryptomarket

02/13/2019
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  • investors_cryptocurrency
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The expectation of institutional investors coming to the cryptomarket was somewhat delayed. The conservative position of SEC and the absence of an acceptable technological solution force large business to be careful. However, things got off the ground. Two US public pension funds placed funds in the Morgan Creek cryptocurrency fund at once.

Venture investment for institutional client

A significant event happened in the USA. Pension funds of police officers and Fairfax County employees have invested about $ 40 million in Morgan Creek venture capital funds. This was announced by its managing partner Anthony Pompliano.

Venture funds are created to place funds in the company in the early stages of their development. They are considered one of the most risky ways to invest, but they have an extremely high yield potential.

According to Anthony Pompliano, his foundation will invest in blockchain-related startups. The technology of the distributed registry has now turned out to be very attractive in terms of profitability. Therefore, institutional investors in the cryptomarket here find very attractive offers.

At the same time, the volume of capital allocation in the cryptomarket for large players is not too large. For example, both funds manage capital for a total of $ 5.7 billion. That is, they invest less than 1% of their assets in the blockchain.

Related institutional investment factors

News about investor activity came amid another important event. The American company Reality Shares creates a mixed-type cryptofund, where no more than 15% of the total capital will be placed in financial instruments related to the blockchain. Thus, SEC is currently considering three applications from large financial institutions at once:

  • VanEck and SolidX for CBOE Exchange;
  • Bitwise Asset Management with the NYSE platform;
  • Reality Shares for working with intsruments from both platforms.

Eventually, SEC will approve the creation of a new financial instrument, which will allow institutional investors to gain access to blockchain assets. Over the next eight months, the regulator must make a final decision, and then the cryptomarket will receive a powerful growth incentive.

Cryptomarket is a decentralized platform for trading digital financial assets. It is built on the principles of free pricing and therefore is not always welcomed by official regulatory bodies.

Consequences for cryptomarket

It is early to draw conclusions about what will happen next. However, in 2018, the well-known analyst Tai Lopez made his forecast based on a mathematical model. He found out that if institutional investors put 1% of their capital into cryptocurrencies, the price of Bitcoin would rise to $ 60,000.

Of course, the situation has changed radically since then. The number of assets has grown, and not all “business sharks” will be ready to invest in the cryptomarket right now. However, we can already say that the first step in this direction has been made. Two pension funds have placed funds in the venture business on the basis of a distributed registry. If this experience is successful, then they will find a lot of followers.

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