Coinbase, BitGo Reaffirm Plans to Focus on Serving Institutions in Crypto

Two US-based crypto behemoths, Coinbase and BitGo, will continue to facilitate growing demand for Bitcoin from institutional investors by operating as trusted custodians.

Earlier this week, BitGo was approved by South Dakota regulators to create and operate a crypto custody solution, while Coinbase established a new office in New York exclusively to handle institutional demand into the market.

Bitcoin Needs Fresh Capital, Institutional Demand Will do it

In an interview with CNBC Fast Money, BitGo CEO Mike Belshe stated that the cryptocurrency market needs fresh capital to initiate a new mid-term rally and properly recover from its 80 percent correction in 2018.

Belshe said that the market has not seen many new buyers emerging in the past eight months. But, with the introduction of several crypto custody solutions offered by BitGo, Coinbase, and potentially regulated financial institutions like Goldman Sachs, Citigroup, and Morgan Stanley, billions of dollars in new capital will hit the Bitcoin market.

He explained:

“What Bitcoin needs is fresh capital coming in, so we haven’t seen a lot of new buyers coming in. So to the extent that Wall Street represents that, yes, Bitcoin needs that, and I can tell you anecdotally that the institutional herd is starting to move their feet a little bit, but they have been taking much longer than I expected… This [custody product] is making me much more optimistic, and this [may be] the solution [that institutional investors have been waiting for].”

Initially, in 2013, BitGo was launched as a blockchain security system, providing multi-signature security services to protect large-scale exchanges like Kraken, Korbit, and UPbit, the biggest cryptocurrency exchange in South Korea.

As the cryptocurrency market started to evolve, BitGo acquired Kingdom Trust, a trusted custodian that oversees more than $12 billion in assets, to facilitate the demand from institutions for Bitcoin. At last, in September, BitGo received the approval from the US government to operate a crypto custody, and is now preparing to serve institutions.

The entrance of BitGo into the institutional market of Bitcoin and the expansion of Coinbase’s crypto custody service which was launched back in July are expected to eliminate the final barrier between institutions and the crypto market that prevented large-scale investors from committing to the new asset class.

$20,000 in 2017 Without Institutions

In his interview, Belshe emphasized the necessity of a new wave of capital hitting the cryptocurrency market. But, in 2017, Bitcoin achieved an all-time high of $19,500, with the price of BTC surpassing $24,000 in South Korea, without the involvement of institutions.

Investors remain highly optimistic in the long-term growth of the market and what the cryptocurrency market would be like with the participation of pension funds, hedge funds, and a wide range of institutions.

At this rate, as billionaire investor Mike Novogratz previously said, the next rally of crypto could be fueled by fear of missing out (FOMO) amongst institutional investors, as long as the infrastructure is robust enough to handle the demand.


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Author: Joseph Young
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Huge Institutional Investment Will Cause A Bull Run, Here’s Where It Might Come From

When & where can we expect the next bull run to come from ?

Some universities on the east coast of the US have begun making small investments into cryptocurrency hedge funds, according to a lawyer in the industry.


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Investors and experts alike are becoming more and more fascinated by the idea that the next big crypto-boom will be caused by major institutional investment. Among other factors, one of the major influences of the cryptocurrency boom seen at the end of 2017 and the start of 2018 came from increased popularity which saw crypto shift from the underground, to the preliminary mainstream in which it exists today. Many now believe that the next step will come from large scale institutional investment which will see new levels of money pumped into the markets. This in turn will cause values to shoot and moreover, the next phase towards mainstream adoption will be met. After the large institutions are on board, the next step will be smaller businesses and then finally, lay-customers.

According to a report from Business Insider Deutschland (Germany), prolific industry lawyer John Lore believes that now, Universities are starting to invest in cryptocurrencies at an alarming rate. Could this be the start of the major institutional investment triggered bull run?

According to Business Insider, Lore says:

“We’re seeing some academic institutions getting involved on a limited basis for strategic reasons. I can’t say the names of [the academic institutions] because that’s attorney-client but we have people mostly on the East Coast that have begun doing investments in this space on a fairly modest basis.”

Moreover:

“There are investors but at this point, investors are putting in very small percentages of their net worth as we would expect and as I believe is appropriate. We see academia as a tie between these somewhat young and enthusiastic fund managers and capital raising.”

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What does this mean?

Well, Lore has evidence that such institutions are investing in cryptocurrencies as some of his clients are directly working with him as a part of these investments. In turn, this proves that at least some mainstream institutions within academia are showing an interest in crypto-investment. If these small investments prove to be of worth, we can expect bigger investments to follow. As these spread, more academic institutions will get on board.

Simply put then, should these investments go well, other industries may start to gather a more prolific interest in cryptocurrency investment. In turn and all things considered, these small investments by some Universities now, could start a chain reaction of big institutional investment, should this small, frankly experimental phase prove to be worthwhile.

Tie this in with the theories that state the next bull run will be driven by institutional investment, and you’ve got yourself a perfect climate within which, cryptocurrencies will indeed rise and moreover, mainstream adoption becomes somewhat more achievable.


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Author Nathan Bentley 
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