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Author Topic: Is institutional capital good or bad for Bitcoin?  (Read 267 times)
krishnapramod
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February 08, 2018, 07:57:50 AM
 #21

I recently read an article that Blockchain's first major use case is as the stock market 2.0 and with the way things are going it looks like Bitcoin and other cryptocurrencies are emerging into a new asset class, cryptoassets. Technology stocks always had a significant impact on the market, and being a new asset class, Bitcoin is still in its early phases, a few perceive it as a hedge against traditional markets, but for the rest, it's still a speculative asset, but as its value evolves as a commodity, it would have more impact on traditional markets.

If you look at things from commodity perspective, Bitcoin as being a mainstream financial investment, then institutional money is good, it's not just about futures, but recently Robinhood announced plans to enable Bitcoin trading, NASDAQ futures plan, similarly if some major firms allow Bitcoin trading, it would give Bitcoin much more credibility and legitimacy as an investment/commodity. I think institutional money might decrease volatility and give more stability and liquidity, but yeah, the downside is the possibility of manipulation along with somewhat a barrier for small investors to get into the market, and even though a disrupting technology, commodity adoption might have more speculation than technology/fundamentals. This is where IMO the currency aspect is necessary.

I like what you are saying. So it is not just about the manipulation, but more than that, it is about the credibility and legitimacy as an investment/commodity on global stock markets. In your opinion, what would be more beneficial to Bitcoin? Bitcoin Futures or Bitcoin ETF's?

Being such a small fish in the pond, would institutional money suffocate Bitcoin or would it strengthen it's growth. I see a situation where big Wall Street traders will only replace the old Bitcoin whales. <Everyone has their price and these guys have enough money to grow a big carrot for these Bitcoin whales.>



The CME Bitcoin futures are cash-settled, no physical delivery, betting on Bitcoin's price movements, it might or mightn't create an actual demand for Bitcoin. But in case of an ETF, traders don't have to buy the asset, but are buying ETF shares while the underlying asset is held by a trust and traders can redeem their shares for the underlying asset, there is actual demand. So definitely ETF's would be more beneficial than cash-settled futures. The US Senate hearing, although optimistic wasn't much forthcoming about approving a Bitcoin ETF anytime soon.

Cash-settled futures market and Bitcoin market, different markets, but yeah manipulation/shorting is quite possible, institutional investors will directly invest into Bitcoin, unlimited supply of fiat and ideologically driven Bitcoin holders, that's something we have to see. I think it's too early to evaluate the effect of futures market on an unregulated Bitcoin market.
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Erza
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February 08, 2018, 09:06:28 AM
 #22

I see this thing in two side, on the first side if they buying now then the price will incredibly surge for really huge price, not saying back at the price of december but at least it will near it or may be of it is a big firm then it will surge more than $20,000. Second side, this is really bad for traders because when they are going to sell it, I believe they will dump it and this will disadvantage traders as well unless traders have really good moment to sell it before it get dumped. So actually it does not really matter whether firm is going to invest or not as long as we can get enough time to buy and sell then it will okay
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February 08, 2018, 11:08:43 AM
 #23

It is bad of course. Institutional money is what bitcoin is trying to replace. Having banks buy bitcoin is like giving your riches to the enemy.
They will buy Bitcoins not for profit, but to destroy it since it is a threat.

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February 08, 2018, 11:16:39 AM
 #24

We were much better without any institution, since the future contracts exist we are only falling!

Do you have any news or article with from someone trustworthy? I would like to see that.

From what I saw, by the day that futures came in, they are not the ones responsible for this. New year and chinese new year played a much bigger role in the fall than futures. Futures may have brought a lot of eyes of inexperienced people to bitcoin but that's a good thing to do, unfortunetley they are the ones who panic sell in the slightestes dayprice variation.
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February 08, 2018, 12:55:32 PM
 #25

I believe that financial institutions and funds need large markets. The capitalization of bitcoin is 145,000,000,000. This is a small market for such players, but they will soon be in it. And then the market will become even more interesting. There will be no more such voluntariness as now on the market.
I think bitcoin will remain an asset for manipulation and profit.

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February 09, 2018, 05:30:18 AM
 #26

I believe that financial institutions and funds need large markets. The capitalization of bitcoin is 145,000,000,000. This is a small market for such players, but they will soon be in it. And then the market will become even more interesting. There will be no more such voluntariness as now on the market.
I think bitcoin will remain an asset for manipulation and profit.

I would much rather attract millions of casual investor with the odd $1000 investment, than some Wall Street cowboy with $10 000 000. These guys are jumping between different commodities at the drop of a Dime and this is causing more problems with volatility.

We now have Fiat whales, competing with Bitcoin whales and this is causing wild fluctuations in the price. ^grrrrrr^

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February 28, 2018, 11:41:30 PM
 #27

I think that institutional capital would probably be good for Bitcoin unti the moment in which it would eventually start to be bad. Initially, the prices would soar very much. But on the long term, as the institutions will control more and more bitcoins, the tide may turn.

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July 14, 2018, 05:29:16 PM
 #28

Believe it has two good and bad effects. They believe in investing in their institutions. Their profits can be again and again. Now bitcoin can be lostes.
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August 03, 2018, 09:06:18 PM
 #29

I think it will be more volatile as an increase in investor and investor's money will mean more price movement for Bitcoin. And isn't the whales doing that already? If the business investors will enter late into the scene it will mean that they will be buying up the price of Bitcoin. Some of the people have even said that they have already entered and they are the ones who have pushed the price down because of the bad statements they are doing. Well I don't have any proof of it but there is a possibility that they have done it.
It is not good news in the market to believe bad news to investors. It will reduce the credibility of new entrants or prepare for investment. Need a healthy playground here to be able to survive long. Hopefully the future will not make the mistakes that they have caused.

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August 04, 2018, 12:11:40 AM
 #30

Institutional investors, funds, professional traders and investors are a crucial part of every market. I cannot even imagine real market without them because private investors and traders have small capital which is not enough to invest serious projects. Let us have a look at unpopular coins which are not interested to professional traders and what we see. There is no liquidity at all in that coins. Let us have a look at the whole crypto market and as we see it is in the downtrend because professional traders mostly do not buy but private traders are not able to lift the whole crypto market. Professional traders are very important for crypto market and keep in mind thet only they can force crypto market to grow again.
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August 04, 2018, 04:01:41 AM
 #31

I think if we want to get up in the trillions upon trillion of market cap you will need the bankers and institutions get in.  If we want to keep things free and buck off government we cannot be greedy for money.  We must be greedy for freedom and keep that money out.  I think most want the money though. 

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August 04, 2018, 04:38:27 AM
 #32

It's going to be a good thing for Bitcoin. Institutions are part of the growth of Bitcoin to become a new class of asset. but, once Bitcoin gets to a certain market cap no institution can manipulate the price anymore. It's just matter of time.
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August 04, 2018, 05:03:43 AM
 #33

I would say that it would be good for bitcoin as such investments would be mostly of long term basis which would help bitcoin price to be stable reducing its volatility.On the other hand,newbies would only contribute for increase in bitcoin's price volatility as they would be holding bitcoins only for a short time.


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BryanRoseWalker
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August 04, 2018, 06:32:35 AM
 #34

I think that institutional capital would probably be good for Bitcoin unti the moment in which it would eventually start to be bad. Initially, the prices would soar very much. But on the long term, as the institutions will control more and more bitcoins, the tide may turn.

it's not as simple as that to monopolize bitcoin assets, we can see that the Japanese central bank finally chose to focus more on xrp and cardano, they can't master bitcoin in the majority. In a free market that does not have strong regulations, there will always be stronger funding.

but on the other hand it runs positively because there is a kind of natural competition, as long as it is not destructive, every institution has the right to be actively involved in it.
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August 04, 2018, 04:22:55 PM
 #35

Depends on what you want from bitcoin. If you want bitcoin to be a currency that people try to use something like debit card and use it like a payment and so forth which was the initial reason the bitcoin started and than institutional capital is bad for bitcoin because it is not looking for bitcoin to be a payment but for something like commodity. If you want to see bitcoin as something you can make money from than institutional capital is good for you because they will also try to look for bitcoin to be something to make money like gold or silver and at that they are capable of doing. So it all depends on what you want from bitcoin is it becoming a currency or a commodity.
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August 04, 2018, 05:41:45 PM
 #36

Do you think price manipulation is not happening now ? Everyday we can see some coin being massively pumped/dumped. Even BTC has been facing this since a year now. We may or may not call it price manipulation but certainly the volatility is huge and the price dumps are huge as well. So if at all the institutional capital gives us a risk of price manipulation, let it be, at least there will be chances for every person to make money , albeit it won't happen according to me.

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