Bitcoin Forum

Bitcoin is showing signs of maturity but the level of institutional investment in the nascent market is still very small, according to Goldman Sachs’ Jeff Currie.

The investment bank’s head of commodities research said that more money from the financial world would need to flow into bitcoin in order for it to stabilize. Bitcoin and other cryptocurrencies saw a brutal sell-off on Monday that wiped off as much as $200 billion from the market value of all digital coins combined in just 24 hours.

That came after a remarkable surge for bitcoin in the last few months, with the world’s most valuable virtual currency hitting a record high near $42,000 last week. Bitcoin is still up roughly 15% since the start of the year, trading 4% higher at a price of $33,873 as of 10:30 a.m. ET on Tuesday. Ether, the second-largest digital currency, was up 5%, trading at $1,058.

“I think the market is beginning to become more mature,” Currie told CNBC’s Steve Sedgwick in an interview Monday. “I think in any nascent market you get that volatility and those risks that are associated with it.”

“The key to creating some type of stability in the market is to see an increase in the participation of institutional investors and right now they’re small,” he said, adding that, of the more than $600 billion invested in bitcoin right now, “roughly 1% of it is institutional money.”

Investors increasingly view bitcoin as a store of value similar to gold, amid worries that unprecedented economic stimulus in the face of the coronavirus pandemic will devalue major sovereign currencies like the dollar.

Last year saw the emergence of well-known Wall Street investors like Paul Tudor Jones and Stanley Druckenmiller betting on bitcoin. Some asset managers have also allocated a small portion of their portfolios to the cryptocurrency, seeking to get some exposure to its wild gains.

I would like to know how that percentage was calculated. 1% of $600 billion is $6 billion, and Grayscale alone in their most recent update (https://twitter.com/Grayscale/status/1349110592326524931?s=19) have about $21 billion invested in Bitcoin, they are not the only means by which institutional money enters into bitcoin and some bitcoins are lost permanently reducing the active market cap. When you consider all the factors the percentage of institutional money gets more significant.

There is still a lot of room for growth but the effect of smart money can already be felt in the price fluctuation. Bitcoin has relatively sustained its value during this period even though most predicted a large correction, we are yet to witness such a crash.

I can agree that the market is more mature than the previous bid dip in 2018. But whatever, good or bad, Goldman Sachs said about Bitcoin and crypto is to manipulate the market. So I guess they are preparing the general audience to expect more infestations in crypto.

If that’s true and only 1% of the money invested in bitcoin is via institutions then that’s a good thing because when they all finally start to flow in the price will sky rocket.

It's true that corporate spending is increasing slowly on bitcoin as bitcoin was able to generate a lot of interest among the corporates recently. The current volume is maybe 1% or even 2% compared to the market cap of bitcoin but I would want that percentage to stay where they are currently. Heavy corporate spending is not great for bitcoin. It definitely provides liquidity to the market but if this trend continues, it wouldn't take long before bitcoin becomes centralized and controlled by corporates! That's a huge risk for common people like us!

When corporate invests into something, they usually do it for long term. If corporates start spending millions of dollars into bitcoin, the proportional number of bitcoin will be taken out of supply for a very very long time and the market will be even more squeezed! It will definitely trigger a price increase due to the basic rules of demand supply! But it would be great for common people at all! When the majority of the bitcoin supply will be controlled by corporates, they will have the power to control the market which we wouldn't want! So it's good to have corporate money to a tiny fraction only!

It doesn't matter if the percentage of "institutional money" is 1% or 5%.The amount is still really small to have any big influence over the market.Most of the influence institutional investors have over Bitcoin is caused by the hype and optimism,which they create,not by the real money that they put in BTC.
The fact that Bitcoin isn't facing any major price crash is caused by the overall optimism and hype.
This isn't "maturing" of the Bitcoin market,it's just greed dominating over fear.

Somehow, I don't think it's over yet.
And we will often wonder what will happen with Bitcoin and cryptocurrencies in general. Because after every significant rise of the price, every time I think that this is the maximum, and by the way, not only me, but many other traders all over the world as well.
And every time I understand that this is not true at all, and after six months bitcoin shows its new maximum. And it is really amazing, it seems to me that it is one of the few assets that does not have any limit. And it is really worth to study the mechanisms of this asset and its features in more detail, because only this, as it seems to me, can lead to something more effective.

I won't bother trying to know how he arrived at the conclusion that out of the money invested in Bitcoin that roughly 1% belongs to institutional investors or is institutional money, but I also think that is not totally right because the attention channelled on Bitcoin which resulted to its growth to a great extent came from institutional investors and for it to maintain the growth till now also attest to that fact. However, I also believe that as time goes on, more institutional investors will come on board because it is becoming clearer that Bitcoin holds a very special and Important stand in the future of money and those who understood that are already making plans towards it. Also, about the maturity of Bitcoin, it can be said to be true because last year as well, even in the midst of the pandemic, it also maintained its stand and still same last year many platforms finds Bitcoin worthy and adopted it into their platform.

Let's be honest, the value of these assets is growing and is likely to continue to grow. So it's worth being as careful as possible and correctly assessing when it's worth buying. That's the most important thing.
As for the reasons for bitcoin's "behavior," I can say this. While most of the assets are weakened now by market situation and many economic and political changes, bitcoin stays immune to it and it was especially clear last spring, when the virus situation was just starting to show itself. If you look at the charts for that period, you will notice that all the assets were in non-standard positions and formed absolutely non-standard levels. Bitcoin, on the other hand, remained in a stable position and did not upset any serious speculation.