Bitcoin Forum

For a long time now traditional traders have steered well clear of Bitcoin and Crypto. This has mostly been due to regulations, but recently they seem to be having a change of heart. There are a few reasons that could be factored in, but undoubtedly the big one is the looming global recession.


Here is why Traditional Traders are Setting Their Sights on Crypto: https://coins.newbium.com/post/30235-traditional-traders-are-setting-their-sights-on-cr

Why do you think they are having a change of heart?

Keep in mind alot of traditional investors and funds (institutional money) is flowing towards projects utilizing blockchain technology. traditional investors don't discriminate on whether it is a crypto project or not they only care about the potential and future returns. Projects like Creditcoin are recieving investment from traditional funds like Y combinator and 500 startups, showing that promising projects truly have no limits.

way too many token already with this no different

Not really. Not many CRYPTO projects invested in by coinbase & y combinator & 500 startups

and the ones that they do invest in usually do very well.

These are institutional investors and it DOES make a difference.

Who told you that traditional traders preferred Cryptos? Do you have any evidence for that? Or any independent news sources?
The global recession is only a guess and not a rationale, so when it happens, traders will look for safe havens, not investment opportunities, and therefore many of them will not risk investing in high-risk currencies, especially in the absence of regulatory frameworks.

Liquidity is the real reason but nobody will talk about that. Back in the day traditional traders would love to come here and make a profit as well but there wasn't really all that much liquidity, bitcoin world had few billion at most in it and that wouldn't really be profitable for a big company to come in and ruin all of a sudden, with just one company like JP Morgan putting all their money into bitcoin would have meant they would have owned all the bitcoin at that time (or almost all lets say).

Now, there is more and more liquidity so people could put in a lot more people and they believe they could do a lot more trading without really ruining the market anymore, sure they could have some affects to it and change the direction but they won't ruin it like they would have previously.

We've been hearing about institutional investors getting into crypto since when? 2017? And yet it's 2020 and you barely see the effects. I'll believe it when I see it.

And with the "Why are traditional traders switching to crypto?" part, the author pretty much just made baseless claims without any backing at all.

Yeah I dunno about traditional traders switching to crypto. I mean obviously some are and have switched a long time ago. Plenty haven't.

As far as institutional money in crypto, it's not in yet because of liquidity. While Bitcoin or the crypto market in general has plenty of liquidity for the average person or even a very rich person, for a billionaire who wants to throw hundreds of millions of dollars around, or an institution that wants to throw billions of dollar around, the $200 billion market cap for the entire crypto space is just way too small. I think once Bitcoin marketcap hits a trillion, so crypto market cap moving towards 2 trillion, that might signal to larger institutions that they can start taking positions in crypto without moving the market too much.

One problem I have never seen mentioned is the fact that there are so many crypto exchanges this causes a problem for large players who want to take positions without moving the market. When you trade a stock there is generally only ONE market. A company's stock is usually on a single exchange so all the liquidity and volume is in a single place, very few companies have their stock on more than one exchange. With crypto there's dozens and dozens of exchanges. Which means it takes a tiny fraction of the overall daily volume to move the price when you take a position on an exchange. This is part of the liquidity problem, that even when Bitcoin reaches a market cap in the trillions the volume is gonna be split up between a bunch of different exchanges, and this also makes Bitcoin easier to manipulate because you only need a fraction of the daily market volume to crash or pump the price on a single exchange.

For sure there are some but i dont believe that most of them had change of heart and jumped in crypto.Some might consider it as an option
but majority just remain on where they are and just wait and didnt tend to touch up crypto since we know on what are the common reasons
of these traditional investors/traders towards into a unregulated market.

There would be always a reason that they can shoot on but well it isnt our loss but theirs.Crypto might not be always a good thing for some
people but soon in future they would surely realize.

I believe most are attracted by volatility.
In classical markets, it is much lower and market fluctuations are much weaker, while in the crypto market we can see a huge amplitude throughout the year.
In addition, local movements can also be quite strong, providing the trader with various opportunities.

As per other articles discussing about these traditional traders going to crypto, their sample size is small. And according to the first article here, they are not sure whether the survey was done before or after market crash. So we are still blind in some aspects. They don't have tangible statistics here. But in case, there is some truth that those traditional traders are favouring crypto, that would be good for us.

https://cryptonews.com/news/traditional-traders-could-be-ready-to-go-crypto-prefer-bitco-6205.htm

https://cointelegraph.com/news/traditional-traders-show-growing-interest-in-crypto

As a forex trader i cant really deny that the main thing on why it made me jump here on crypto market is due to volatility yet we know the higher the volatility the large profit you would make and im fully aware on the equal risk to it but it do really fascinate or do make me interested thats why i decided to stick and never go back to traditional market on time being.

Im getting hooked up with the price movement which is totally different from traditional markets and im pretty sure that some forex/stocks traders would have the same input or views towards this.
So it isnt surprising for them to transfer out to this market.

Probably they're preparing for the worse in case the stock market makes another major fall. They're probably finding hedge for another great depression, if it weren't for this financial crisis we wouldn't actually see that most Institutional and traditional traders actually invest and trade in it. The fact that stocks and Bitcoin are correlated with the price is more than enough proof.

I think that is for some reason why they move to the crypto trading. They need to make money from a similar platform, and after those people research, they found out that crypto/bitcoin trading almost the same and maybe it's have correlated, so some of them trying to trade in the crypto platform. That is the simple reason why traders invest and trade in the crypto platform. But maybe there is another reason for that, and we don't know the real reason for them.

I believe that traditional traders are beginning to see the potential of the crypto markets. This happened before the pandemic crisis even started. Over the past couple of  years, the Crypto market has slowly matured into one of the most interesting markets are the moment. Can you all remember that Bitcoin did hit $3750 last month? Well, it went to $7400+. That's over a 100% increase since hitting the low. Which stock assets have accomplished similar feat so far? None.

I think bitcoin didn't go as low as $3750 last month, I think the all-time low last month is not under $5000. I also think the dumped happen last month is because of the pandemic actually it is not only the cryptocurrency market that is affected even stocks and other trading assets. I think one of the traditional sights I see on crypto is when bitcoin got a massive dump or pump, Bitcoin price will be in correction after a few weeks it happened. It's the way I see bitcoin before.

I think you missed it. I observed the price of bitcoin that day. It dropped about 35%-40% if I remember correctly. Coindesk even wrote an article about the drop since it was epic: https://www.google.com/amp/s/cointelegraph.com/news/bitcoin-price-drops-to-3-637-rebounds-above-5-200-within-minutes/amp – It even went lower than I wrote in my first reply. And yes, you're right. The Coronavirus pandemic caused the sharp drop. A lot of people got scared and majority of the financial markets took a hit.

yeah but traditional traders can also make money when the price goes down.

For example by trading leverage / margin. Also being able to read charts. For example coins like creditcoin which are in a upward trend I have been building up my stack by selling before the dips and buying at the bottom of each dip

No, i don't think is due to regulation, just another financial product for them to trade only.
More choices more opportunities.
And for now because of uncertainties , not every traders are high-risk one, so they need to do some hedging.

Many of them will try the crypto market becuse of this global recession. There's also the halving. Many of them are still doubtful on bitcoin and its altcoins, they are only here to try making some good profit. And they will leave once the global market is back or when there is already a cure for COVID-19. But some of them will become interested as well.

Although they are doubtful, if they want to search the other opportunity to make money, they will try it, especially for people who still want to survive in this global pandemic. Let them comes into the crypto market because that can help the crypto market gain something and who knows, with the new player in the market, and it will give fresh air for the market itself. Besides that, that new person can invite their friends who involve in the stock trading to try with the crypto market.

Lack of liquidity has been lesser and lesser since 2018 downfall, I know that during the 2017 peak we had huge liquidity and we haven't reached those levels just yet but it dropped to an insane level during 2018 which we are recovering from. So, the rich people and traditional traders saw this and realized that they could go into bitcoin and not really ruin it all by themselves, surely if they get together they would still ruin it but individually they are no longer strong enough to change anything so they are more interested.

I hope more institutional investment comes along, it will allow us to get bigger because those people have networks and connections and that could come in handy when we want to get bitcoin more support from governments.

We cant precisely tell if institutional or traditional investors would jump out here on crypto yet theres no sign or new that they would reconsider crypto as part of their holdings or asset.
So the only thing we can depend on is that if the price do shoot up then we can presume that there might or might be none of those new people that invested or traded here on crypto  space.
Its just normal that traders will jump automatically into things on where they do able to look that they can able to make money, no matter what it is.

You guys are wrong. Institutional investors ARE investing in crypto, its just in smaller projects with real world use rather than shitcoins and scams.

Look at creditcoin for example, investments by y combinator, 500startups etc

solving real world issues, and utilizing blockchain technology to do so

These are the types of projects institutional investors are interested and investing in.