Are institutions hedging?

[Broly46]

Institution are just in for the profit, they don’t have much choice since they have too much cash on their books, and with interest rate hitting record low, they’re running out of options, they need to move their money else where, it just happen they come over to the crypto due to it’s easier to access, the central bank decision to severe the interest rate is what force everybody to INVEST their money but not to save it for raining day, although there is just a fraction of institutions get into bitcoin, and they invested less than 10% of their total wealth, a large fraction of institutions are on the sideline watching and take no position.

[1715095293]

1715095293

[Silberman]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting an major economic crisis after the COVID-crisis?

I really think that is exactly what's happening, it is widely known and it is a very common strategy for those that are incredibly rich to put a small portion of their money in assets like gold hoping that it doesn't work because if gold begins to skyrocket then you know the economy is in a lot of trouble, it is a way to maintain your wealth in case everything goes down the drain and it seems to me that powerful people are seeing that politicians are slowly losing control of the economy, they are trying to desperately gain that control back but most likely they are going to fail, and they need an insurance policy and it seems that some are choosing bitcoin as that insurance policy.

[just_Alice]

I don't think that it's instituitions' intention to manipulate the market: there's too many of them and more and more companies are investing in Bitcoin so in order to manipulate they'd have to collaborate, work together on this (and what's the profit in it, if they're all rivals), considering that now the Bitcoin daily volume is around $9 billion. I don't think it's a FOMO either, $1.5 billion investment is too much money to be triggered by something like that. IMO it was a well-considered decision for Tesla and the same can be said for other companies.

[ice098]

Celebs doing their thing.

They dont care about the problems faced by the economy after a pandemic, but their own profits and using the market's situation to bullrun their own assets. There is a lot of FOMO, I agree. This is the time to sell bitcoin and Dogecoin if you own any and hold USD - the intelligent move. Wrongly though some newbies will rush in the FOMO and I am expecting a drop in price after this trend ends at which point the actual buying should be done.

Now institutions may be hedging funds or not, cannot be said right away. They are trying to move a stagnant market of bitcoin to a moving one is my assumption. They may be trying to use this opportunity to make a profit off what they had bought. It might vary from person to person.

Again the rich people will always become rich, so no crisis for them but more chances of profits. The middle and poor classes will suffer.

Institutions investing in bitcoin are normal we will in this kind of situation because investing in bitcoin is such an opportunity and a good chance for a long term investment, so since institutions already research about this and have some financial knowledge they will do what they can to accumulate more bitcoin so in case bitcoin might surpass dollar or physical money in the future they already have a hedging instrument which is bitcoin.

[Karartma1]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting an major economic crisis after the COVID-crisis?

I really think that is exactly what's happening, it is widely known and it is a very common strategy for those that are incredibly rich to put a small portion of their money in assets like gold hoping that it doesn't work because if gold begins to skyrocket then you know the economy is in a lot of trouble, it is a way to maintain your wealth in case everything goes down the drain and it seems to me that powerful people are seeing that politicians are slowly losing control of the economy, they are trying to desperately gain that control back but most likely they are going to fail, and they need an insurance policy and it seems that some are choosing bitcoin as that insurance policy.

We can't be naive here, because without institutional money flowing in we would have never seen these prices so fast. Institutionals are not here solely because bitcoin is scarce but they are here for what this digital scarcity means in the digital realm. There's nothing like bitcoin with the same properties and those who got it are now finally in the game. I expect this to be the major narrative.

[virasisog]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting a major economic crisis after the COVID-crisis?

No one knows what are the real motives of institutions on investing in crypto or using it as a hedge fund. It could be true or it could be they have seen the potential of cryptocurrency. Crypto will not reach its current state without these institutions initiative, I wonder how long can this market keep up, or will there be a moment when these institutions holding a huge amount of crypto dump the market. Imagine how many retail investors will lose a huge amount of money.

[bits4books]

Hiding from the crisis in cryptocurrencies is a pretty stupid idea. And not even because during the crisis in recent years, there is a tendency to print money to get out of this crisis, which leads to inflation - but because during the crisis, cryptocurrencies fall in price and/or stop their growth, just like the regular stock market. You think that cryptocurrency is a safe bunker during a crisis, but in fact it is just as much a bungalow made of straw as fiat currencies. What difference does it make how much money you have if the real purchase power doesn't depend on it?

[Reid]

The same reaction I received from one of my friends who knows little about economics.
When I told him about the news that Elon Musk or company bought that huge amount in Bitcoin.
He reacted without thinking deeply that it would lead to manipulation.

It's difficult to tell what their goal really is.
But it's also scary when huge companies are using their purchase power to gain it.
Economic crisis or a different reason, we should all be prepared for whatever the outcome will be.
Best to hoard more Bitcoin too.

[electronicash]

its actually a good idea to use BTC to hedge, when the value of currencies is speeding down, they have to protect their assets from the effect of the crisis. MicroStrategy is buying, the rest of them are probably just buying silently. they are gradually coming to crypto. at some point, more of them will come into crypto to make money. hedging is just one reason but definitely, these guys are also the ones that will drag the prices down.  

[ipanks]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting a major economic crisis after the COVID-crisis?

No one knows what are the real motives of institutions on investing in crypto or using it as a hedge fund. It could be true or it could be they have seen the potential of cryptocurrency. Crypto will not reach its current state without these institutions initiative, I wonder how long can this market keep up, or will there be a moment when these institutions holding a huge amount of crypto dump the market. Imagine how many retail investors will lose a huge amount of money.

The institutions will not tell their reason to the public and let the public guess of their reason. But we can assume that they want to invest in crypto as a hedge fund of their money, and they want to invest in a new investment type that is already booming from this year. It is good for the crypto market or bitcoin market because, at least, that can boost the popularity of bitcoin in their eyes. They can buy a large amount of bitcoin, but they can remain silent and not tell how many bitcoin they already invest.

[FanEagle]

Hiding from the crisis in cryptocurrencies is a pretty stupid idea. And not even because during the crisis in recent years, there is a tendency to print money to get out of this crisis, which leads to inflation - but because during the crisis, cryptocurrencies fall in price and/or stop their growth, just like the regular stock market. You think that cryptocurrency is a safe bunker during a crisis, but in fact it is just as much a bungalow made of straw as fiat currencies. What difference does it make how much money you have if the real purchase power doesn't depend on it?

The difference is that on a regular day crypto still keeps going whereas money keeps losing its value. For example, if you had 1 million dollars at the start of 2020 and you had 1 million dollars worth of bitcoin at the start of the year, that 1 million dollars in cash couldn't even buy you the same things, why? Because inflation made things more expensive, but that 1 million in bitcoin would have been 7 million dollars or so right now and could have bought anything you wanted and then some.

Long story short sure during the march fall just like how markets dipped, oils dipped, gold dipped, during that period bitcoin dipped as well I get that, but this is cash versus bitcoin and bitcoin wins every single time, if you want to go with stocks go ahead who can stop you, maybe you will find a stock that is more profitable, but bitcoin is a currency and it is a better currency than dollars or any other ones.

[Wind_FURY]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting an major economic crisis after the COVID-crisis?

Tesla or Elon Musk are not institutions. Right now many people expect corporations and companies will start buying Bitcoin just like Tesla. Not the institutions.  

Haha. Tesla is definitely AN institution. Companies are Business Institutions.

For Tesla. If Musk would want to hedge Tesla against fiat collapse, he would also buy Gold. He did not, he only bought Bitcoin, so it is pure speculation.

You don’t believe Bitcoin would do very well during negative economic events like, Hyperinflation?

Plus, a question for someone who studies economics or economics enthusiasts, would a situation when the velocity of money is “LOW”, but the money supply is very “HIGH”, cause hyperinflation?

https://fred.stlouisfed.org/series/M2V

[Swordsoffreedom]

The way Bitcoin is being adopted in many countries around the world has already caught the attention of many big investors. Grayscale's investment in Bitcoin and the sale of those shares at inflated prices has received a lot of response from at the institutional level. I think, Tesla, Inc. considering the future potential of Bitcoin and its rapid rise in value and they realize it is profitable to invest in Bitcoin, and it's just a nice way to advertise and promote themselves to the digital world.

[Mauser]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting an major economic crisis after the COVID-crisis?

There is no real way to destroy bitcoins. Two possibilities exist but are not very likely to happen. You would need to buy all bitcoins and just stop trading them, or bring the price down to 0. Both of these scenarios are not realistic in my opinion. Once word gets out the ibstitions are trying to take over the market then price would rally a lot, same goes for shorting the market.

[Silberman]

There’s a topic debating that institutions are manipulating the market, and will “destroy Bitcoin”. I have a different narrative.

While it’s great that Elon Musk and other companies are HODLing bitcoin, but don’t you think that there is more into their FOMO, than profit? Are they actually hedging against the current financial system? If the answer is yes, are they expecting an major economic crisis after the COVID-crisis?

I really think that is exactly what's happening, it is widely known and it is a very common strategy for those that are incredibly rich to put a small portion of their money in assets like gold hoping that it doesn't work because if gold begins to skyrocket then you know the economy is in a lot of trouble, it is a way to maintain your wealth in case everything goes down the drain and it seems to me that powerful people are seeing that politicians are slowly losing control of the economy, they are trying to desperately gain that control back but most likely they are going to fail, and they need an insurance policy and it seems that some are choosing bitcoin as that insurance policy.

We can't be naive here, because without institutional money flowing in we would have never seen these prices so fast. Institutionals are not here solely because bitcoin is scarce but they are here for what this digital scarcity means in the digital realm. There's nothing like bitcoin with the same properties and those who got it are now finally in the game. I expect this to be the major narrative.

There is no doubt in my mind that institutional investors are a great part of the growth that we had been seeing during the last months, institutional investors for the most part would have not come to this market if they did not thought that this market had great potential and that they could get bitcoin for a relatively cheap price and obtain profits in the short term, but I really think that they are not thinking as much in the short term and they are instead worried about the long term prospects of fiat currencies, and they are trying to protect themselves with an asset that will do well in the case fiat currencies have trouble and bitcoin is a good candidate for that.

[oHnK]

There is no doubt in my mind that institutional investors are a great part of the growth that we had been seeing during the last months, institutional investors for the most part would have not come to this market if they did not thought that this market had great potential.

Another reason could be that they are looking for a way to make a profit in a relatively short time by buying low and selling at the top. Isn't it quite boring nowadays to play in the world of stocks, gold, or forex? so the bad possibility is that they are just bored with other instruments so they choose Crypto. But this is just bad thinking, we still have to be positive that this is the glory of Bitcoin.

[suzanne5223]

Those that believe the institution will destroy or manipulate the Bitcoin market have their own reason and from my impression, they are saying to alert the community so they would prepare for whatever may happen because we still can't be sure what the true intention of the institution is about cryptocurrency investment but it clear that their move to crypto is for the preparation of the economic crisis that will hit the world after COVID-19 crisis.

[Coyster]

It's possible for institutional Investors to manipulate the market, FYI, the BTC network has always been subjected to one form of manipulation or the other, but the thing is, it can't destroy the market, even after a manipulation, there'll definitely be a plunge, but with more time, the network will appreciate on a different factor.

So the thing is, this institutional Investors are still a plus to the network atm, I don't know if they are basically here just to make profits, but it matters less, if they pull their assets out of the network, it will of course affect the price, but it'll only be for the meantime and that's the good thing with Bitcoin, no institution has the wits to crumble it, thus I don't see any reason to fret.

[jseverson]

So the thing is, this institutional Investors are still a plus to the network atm, I don't know if they are basically here just to make profits, but it matters less, if they pull their assets out of the network, it will of course affect the price, but it'll only be for the meantime and that's the good thing with Bitcoin, no institution has the wits to crumble it, thus I don't see any reason to fret.

I agree with what you said for the most part, but I'd say big players being able to toy with Bitcoin prices is still very much a reason to fret, because that damages its reputation. One of Bitcoin's biggest draws at the moment is that it's separate from traditional finance, but what happens if a bunch of corporations are able to control its price? I'm not saying it's easy to do, but they can essentially do it all they want and get away with it scot-free, making the market a less attractive place for newcomers.

I would like to believe that these institutions are simply using Bitcoin for hedging, but in Tesla's case, it may have already made more profits from its Bitcoin purchase than actually selling cars, and I feel like Elon knows he has a significant influence in the market at this point, being able to move it with his Twitter account. There's really nothing stopping him from trying to push BTC up as high as he can before dumping one way or another. The beauty of Bitcoin is that anyone can use it however they want, but situations like these leave a bit of a bad taste in my mouth. I'm guessing we won't need to wait long before we definitively know the answer to OP's question.

[el kaka22]

I agree with what you said for the most part, but I'd say big players being able to toy with Bitcoin prices is still very much a reason to fret, because that damages its reputation. One of Bitcoin's biggest draws at the moment is that it's separate from traditional finance, but what happens if a bunch of corporations are able to control its price? I'm not saying it's easy to do, but they can essentially do it all they want and get away with it scot-free, making the market a less attractive place for newcomers.

They are way too big in this right now, they put way too much money to "toy" with the prices, so when they leave they will hurt the prices so much that it wouldn't be just toying with the price, it would be ruining and destroying the price for months maybe years.

Hence, I do believe that these huge companies going in is something much better than what big companies did back in the day, sure if you get in with 100 million dollars you could sell 50 million of it, while buy short futures with the rest and after you sell your short futures would be worth 200+ million and you could still get 20-30 million of it back from the sold ones and your 100 million would be 220+ million dollars. Whereas if you want to do that with 1+ billion dollars, you would ruin the price way too much and fail. Hence I think they are here to stay and they will hold their bitcoins as long as they have to, not like they are people who need money so they will just hold it forever and would be fine with it.