Bitcoin Forum

Perhaps you will be surprised by the title of this topic, as we have always assumed that the participation of large institutions in the crypto market will have positive effects because:
+ Crypto is advertised and became popular with the community;
+ Value of crypto accepted;
+ The increase in buying pressure causes token prices to be pushed up.

However, everything is not just pink. I realize that besides such advantages, the participation of financial institutions creates a number of risks as follows:
+Financial institutions are likely to use crypto in the art of accounting like Tesla did with BTC. Crypto will become a tool to manipulate financial reporting metrics rather than an investment;
+Financial institutions have bought a lot of crypto and they will sell a lot of crypto: this happens when financial institutions want to take profits or offset losses. This sell-off will create a huge drop as ICO projects sold out huge amounts of BTC & ETH in 2018 after successful funding. Financial institutions are not the place to burn tokens ^^

What do you think about this? Will the participation of financial institutions have a positive or negative impact on the crypto market in long term?

Positive when we're talking about crypto going mainstream and increase mass adoption.
Negative when we're talking about privacy since regulators will tighten up anti-money laundering policies on all exchanges and custodial services.

I don't know anyone other than a newbie who would expect price to go up forever. FUD, corrections or pullbacks are part of the crypto ecosystem.

The supply can be centralized into some entities and these entities can use it as a way to threaten the market. Elon proved that if it was working. We need lots of entities to buy crypto to make the ownership became divided into so many entities and this will be decreasing the possibility for the manipulation to happen.
We still need major players to enter into the crypto market to increase the trust and value

It's true that a few companies are gulping up BTC but I don't know what you mean by "threaten the market". They can create FUD and all that like what Elon did before backtracking but those panic selling have always been absorbed by the market.

This will require the mentioned entities to sell their stash.

They will plan better than us. Big money always win the war.
Im sure they entry to crypto with a great plan to take big benefit from it.
If not a profit, then kind of tax laundery or something like that which can hurt our space in the future.

There are ways to minimize the risks such as reading news and analyze trading volume. Just like in stocks, there are institutions investors holding a big number of stocks, derivatives, futures. Manipulations happen anywhere, whether it is cryptocurrency or other kinds of investment. Be a wise investor and you might know how to prevent big loss.

Even bad publicity is still can give us a nice spotlight.

The dump is not always like manipulation it self, but sometimes the bubble just already explode and we're going to 4 years cycle again is always like that. In the end every 4 years we reached another level ATH + another level bottom price.

Of course there are positive and negative impacts, if it is said that in the long run it has a positive impact, as long as this company does not play the market so drastically as what Elon did with its tesla.

I do believe that the biggest problem is the one we are living right now. What is it? Well if you have 18 million bitcoins, most of it gone already, have like let's say 8 million bitcoins left that are traded, let's be honest it is much less than that daily, but let's assume there are 8 million bitcoins "available" to be traded, and some guy swoops in and buys 1 million bitcoins and now the market has 7 million bitcoins available. That will increase the price right?

Well, sure it will however that will also mean that if someone sells a big amount there is less available in the market to be bought, and that sell will be a bigger portion, selling 10k bitcoin in 8 million bitcoins vs selling 10k bitcoin in 7 million bitcoins is not the same, consider only 1 million left, that will make it more obvious. So, even though these huge companies make it easier, they are also making it harder later on.

Big financial institution participating in Cryptocurrency is a good thing.  I think it gives many more people opportunities to participate in Cryptocurrency investing and help the market to be robust and stable. The flip side to this is when huge funds has to be taking out for one reason or the others, it will definitely affect Cryptocurrency prices in the short term,  but you can bet there will be recovery soon!

it must work both ways. youd be grateful the large i stitutions are coming because cryptocurrency will be widely accepted. you  can now say to the people who says Bitcoin is a scam that Paypal is now a platform for which a user can buy BTC.

but at the same time, big swings in the market price will occasionally happen because these institutions are accumulating by manipulating the market.

Entrance of financial institutions are not great news for the cryptocurrency but it can help us with adoption of cryptocurrencies, so at the end we will have more people who are using will be increased so the final result will be mass cryptocurrency users. Know the risk before getting into the cryptocurrency, and don't forget that this is not a quick rich scheme.

Investors are asked to understand the risks of cryptocurrency before investing, then they must also be careful when investing in cryptocurrency, which has recently become an alternative investment and financial transaction in the world. This is also a warning to businesses in the cryptocurrency sector to better comply with legal provisions and manage investment risks, so as not to violate the law and harm consumers.

Correct.

Wrong, this is also a positive.

We tend to see regulation as something bad but do note that the reason of why bitcoin and crypto have a negative image in the public mind is because of the money laundering that happens with the lack of regulation. If they would be regulated, more governments would be willing to allow trading freely and removing the "grey area" concept that has been plaguing this sector.

Who needs to be put behind the bars are the ones who manipulate and take advantage of the pseudo-anonymity provided by crypto. Those are the criminals and they are always going to vote for non-regulation of crypto because it hurts their business. Try to understand this.

Retail investors who pay their taxes and abide by laws will be willing to do trading but currently facing apprehension regarding government stance - they would be more interested in crypto if it would become regulated.

If crypto is a bubble waiting to be burst then the price will keep going up and up until things go side ways but it's not, the fact that crypto projects remains highly volatile is why crypto will keep surviving, it's called balance in another word, price must go down it's a must, only crypto newcomers will have a dream up forever surging in their heads

That totally depends on your perspective dude. Sometimes institutional adoption gave more exposure that is actually needed by crypto but again you should not worry about the liquidation problem by them because it's nature. They bought and they can sell it too.
In my opinion if this gives a very big impact to the crypto. You must see that how much bitcoin owned by some institutional investors and that was giving a very big impact to the ecosystem.
The only problem is that may make the token or coin became decentralized caused by it already bought by the institution.

I think there are still a lot of bad views of people out there regarding crypto. it's all about market manipulation and money laundering. We can't say that won't happen in crypto because we know the weaknesses and risks of crypto.
but when a large state financial institution begins to understand and understand how crypto is a solution, I believe this will be good news to pump up adoption in the crypto market.

I'd rather say "big money," not "large financial institutions." Pros and cons depend on whether they buy your bag or something that isn't inside your bag.
Lawful big money is okay, but unlawful big money* is a no in the long run.

*Unlawful big money comes from money laundering, scam, P&D shill, and other shit. It's not good if governments do harsh measures to the crypto market, and treat it like a criminal market.

Welcome to the crypto people who live and breathe on this forum. When big institutions and countries go into crypto or blockchain, everybody cheers,,, and then when they decide to change their mind or go another opposite decision, everybody tells them to get out of crypto and stay away;)

Take the good with the bad I agree.

As long as it doesn't lead to any regulatory action against crypto as a whole, this is irrelevant to crypto.


It's stil a net positive, because not everyone will dump, and crypto gains more reputation as a store of value.

By the way, you can't really say that institutions are buying "crypto", so far they only bought Bitcoin and nothing else.

Trust me,,, those who would have learned something never got sold into the elon hype and elon fud after that.

Those who got into it, who fomo'd and then sold when he changed his mind? Those people would never learn from this kind of thing and during the next bullrun in a few years, they will fall for it all over again.

If large institutions decide to sell off it won't make any big difference because they aren't the only ones adopting crypto, look around you it's a big difference to four year back where people look at you like you are crazy when you mention crypto and BTC, adoption is growing bigger

I think you're too optimistic about that. Those big players can easily sell $1 million worth of BTC within a minute or so, and I doubt the orderbook can absorb that volume easily. Sure, they can do it OTC, but when they do that, there's no guarantee that insider/the broker itself follows it by selling some of their money, so there's still a huge sell pressure.

Well, hopefully this hate and love relationship between institution and retail investors won't last forever.

1 million dollars is nothing, that is happens constantly, it happens so much that it happens probably nearly under 5 minutes each day, a million dollars is sold exact 5 minutes, it is incredibly common. You know why? Because we have over 33 billion dollars in volume, I do not know how they calculate it but that is over 1 billion dollars per hour, yes that is right over 1 billion dollars per hour.

You know why whales can't impact the price? Because they do not really have as much influence over the price with just their wallets. But do you know how they can? They can tweet about it and tens of billions of dollars worth of bitcoin all over the world will be sold, that's how. So it is not their wallet or basically their money that can destroy the price, it is their influence that can destroy it, all they have to do is say something bad and they would cause a huge crash.

I always expect a financial institution to eventually sell out all their posession but many of them also gonna hold it and maybe doing some sell but gradually however that's not gonna affect the market since they are smart enough to figure out how to retain the profit they get without getting affected by the market depth, unlike elon that keep boasting about tesla dumping, etc .the institutional investor are also gonna be more invested in crypto technology so I doubt they even gonna sell all their posession of crypto, they are coming here not just for flipping money but maybe investing for the technology in long term.

Depends on what they want to really do with crypto.
I believe the right crypto companies should operate more like Uniswap or as non-custodial services . Holding funds for investors could make price manipulations easy for them. It's better that most/all users are able to easily and safely control their funds and use them within their respective cryptocurrencies economies.
Choose the right project/community to stick to long-term and stick with them. That's how responsible businesses/investors should operate.

I think that you forget about the impact that will be created by the institution when they were liquidating their coins in the market instantly. It can create a very big panic sell to the market and that was giving a very big impact to the crypto market. You must see that how big the impact for crypto market when ELON was creating FUD for bitcoin.
I think that you can remember that easily dude.

continuous sell from big bag holders creates big impacts inside the market.

Institutional investors who loves playing with the emotions of those unaware traders mostly gained a lots of money in the short

time, they are familiar with how to ride with volatile market, those quick dumped creates huge impacts as weak holders

reacts right away.

There are steps you may take to reduce your risk, such as reading the news and analyzing trading volume. Manipulation can occur in any type of investment, whether it is cryptocurrency or another. If you are a clever investor, you may be able to avoid a large loss. The dump isn't always like manipulating, but sometimes the bubble has already burst and we're back on a four-year cycle is always like that.

Financial institutions using crypto to give stake holders  their financial position I don't think so!

Big financial institutions are likely to be using crypto as another investment from many other invests.
Cooking numbers you mean...not as easy as it sounds, and btc was another investment that was taken by Tesla and not that the company went all crypto.

A company will have to show annual profit and loss, so whether a company invests or not they will bear consequences.

Dont consider this as a bad sign though. It shows that bigger companies interested in crypto and this might be a point for the policy makers to bring in crypto to the general public in countries where it is still a grey area.

People tend to over think the bad effect so much that they fear growth. Think about the time when gold was the biggest thing one could buy in terms of price. Did financial institutions not buy it? Heck yes they did and a lot of them did. These are future investments and they do it for their profits and growth. It drives the price of the asset and allows the early retail investors to make money too. Hence I consider these events as opportunities and not risks.

The risks of investment funds getting involved are clear. The things you mentioned above happen in crypto and happen in stocks and other markets.
The benefit that I see with financial institutions coming to crypto is legal recognition and market capitalization expansion.
Investment funds will make the cryptocurrency market grow faster and more professionally.

Perhaps, they know already what will happen to them when the market will fall and they are willing to take the risk. On our side, of course, it has a positive impact in a way that it helps to maintain the huge demand and market volume. The adoption of these financial institutions encourages other companies to do as well. We're not seeing what would really happen in the future but most likely, it was not the worse thing I saw, I'm thinking about more market adoption than of today.

The aim of every individuals in crypto be it trading or investing is to make profit likewise the financial institutions that are entering the Crypto market. Everyone needs to buckle their shoes in other to make something tangible from the market, not just making blind assumption about the entire market.

The financial institutions involvement in crypto market is going to make it more volatile cause there will be high volume of buying and selling which will increase the pace of the market movement. Although there might be frequent manipulation but since everyone understands the risks that are involved in it, precautionary measure should be taken when investing or trading.

I see it's not a risk for the crypto market. the more institutions that are interested in crypto the faster mass adoption will take place. this will make the world pay more attention to crypto. this is like the case of tesla and elon musk some time ago, he said that at that time he was holding btc and receiving electric car payments with bitcoin. This made big news and made the market in pumps. although in the end he was also the one who made the market crash because of his statements about crypto mining and electricity usage issues. but one thing we must pay attention to, with the presence of institutional investors, the market will develop faster.

We should stop thinking too much about what will happen in future about this. Reason being that we humans tend to go for negative outcomes more than positive outcomes while in reality both can happen but mostly it is a positive outcome. So instead of worrying over whether some big institution will bring about the full control over crypto and make every crypto holder a pauper, lets keep it on the bright side.

We increasing pressure on governments to start allowing crypto a legal tenders, there will be a paradigm shift in the upcoming years about the sentiment about crypto. I am expecting a boom to happen in this sector in the next decade. That means more money for older adopters and therefore one should theoretically keep stockpiling more bitcoin.