Bitcoin Already Being Accumulated by Institutional Investors: Experts
Crypto investors and traders alike were thrilled by the announcement of Coinbase Custody that the part of the industry promised to cater to institutional money was finally beginning to take form.
However, prices haven’t reflected the newfound hope that institutional money can finally crush the brutal bear market, one that’s plagued the crypto markets since the highs in December of last year.
According to experts, Coinbase Custody may be already be using institutional investors and similar setups behind the scenes, and these investors would be stupid to do anything other than keep quiet, while they accumulate Bitcoin and other cryptocurrencies at these comparatively low prices.
Hjortur Justinussen, the Financial Analyst at Cindicator, told that there is a possibility that institutional investors could be waiting for the CBOE Bitcoin ETF, which may get approval from the SEC in the coming weeks:
“Investors would likely to keep quiet in the accumulation phase (which is now). Coinbase has insurance for all digital currencies held, covering physical security, cybersecurity, and employee theft. Also, less than 2% is held in online storage at any given time.”
“They charge a $100K setup fee and min $10M investment and 10 basis points in monthly fees. The question is then how much will a possible ETF by CBOE charge compared to this.”
He continued to explain that some institutional investors may use Coinbase Custody or OTC (over-the-counter) trading to try to build positions prior to any price spike from the ETF:
“The public trust in CBOE would be higher than Coinbase at any time. Therefore I assume most institutional investors would wait for CBOE ETF since it is in the pipeline already. That being said, if the expectation is that the launch of the CBOE ETF would cause a big spike in the price, then they might use OTC or Coinbase Custody in the meantime to capitalize on that potential move.”
With a matter of weeks until the potential approval of CBOE’s Bitcoin ETF and the custody solution from Coinbase already up and running, it appears now would be the time for the first round of new institutional money to enter the market, if it hasn’t been doing so already.
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