Risks of instituations holding bitcoin

[kuldipgajjar]

Along with the explosion of interest in digital currency and all of its implications for both new and traditional businesses, there is a growing need for clarity regarding the legal implications of these new technologies and currencies. As governments around the world, regulatory agencies, central banks, and other financial institutions are working to understand the nature and meaning of digital currencies, individual investors can make a great deal of money investing in this new space.

[Kittygalore]

It is definitely risky for retail investors when institutional investors get in because they can do a hodl of their bitcoin for a really long time and comes with that is it raises the prices that might dishearten upcoming retail investors from investing because they won't be getting a lot of bitcoin value for the money that they are going to invest in, the only thing that I can think that can entirely negate this risk is for retail investors to get in right now, right now that the prices are still manageable and you can still get more value.

[Pamadar]

I don't think institutions holding Bitcoin are anything to worry about. Because pump and dump has often happened to Bitcoin, so if there is
an institution that sells all the Bitcoin it owns. Then there will be new institutions that buy Bitcoin, after all, there is not only one institutions
holding Bitcoin. And I believe all institutions that hold Bitcoin may not sell Bitcoin at the same time, so I am not worried about the many institutions
holding Bitcoin.

yeah right, there's always someone who will willing to absorbed those sold coins, and vice versa.

We should always aware ourselves to whatever position we took from this venue of investment, the

more you understand the more you can easily position yourself.

It is definitely risky for retail investors when institutional investors get in because they can do a hodl of their bitcoin for a really long time and comes with that is it raises the prices that might dishearten upcoming retail investors from investing because they won't be getting a lot of bitcoin value for the money that they are going to invest in, the only thing that I can think that can entirely negate this risk is for retail investors to get in right now, right now that the prices are still manageable and you can still get more value.

The earlier the better,  who knows what inside the minds of those institutional investors. It's difficult

to predict  what future awaits to this industry, the system is now being eyed by many institutional

investors, with them there's always the huge change that might happened.

[Anonylz]

Institution buy btc and hold, 'it is a risk' individuals buy btc and hold, 'it is a risk'  (whales and the likes) which means this is an inevitable case which the btc community must have to accept,
it is already too late to expect even distribution, there is always going to be some party having a larger share of the supply than others,
This can't be balance, if we want Institutional investors to be part of the space then this is some of the consequences of their involvement I presume.

[so98nn]

^ Yes, there could be a risk on the market price because they holding a big amount that anytime they will sell it at once and may have an impact on BTC price. Big investors like big institutions are considered as also whales but they don't have regularly playing the market, the most afraid is when they are all the same in the mind of selling their BTC. I don't know what will happen if most of them believe in FUD and do panic selling, BTC price will probably crashing out that causes a sudden dump. Nevertheless, in my mind thinking that it is impossible to happen, we are already in the middle in the mainstream, and BTC price keep growing.

They will never to panic sell mate. They are the reason bitcoin is holding it's current position. Institutional investors are those who want highest possible rate for their holdings. They are big game players and do not want 50K, 60K! They are dreaming of 100K and plus for the bitcoin. Institutions know that if they start selling then rest of the market will also do panic sell thus changing the whole math of their plan.

It's like if they are able to hold the bitcoin at highest prices then they could possibly destroy it too. However, they won't because they are staking bigger amounts which they dont wanna loose in the process.

[Kong Hey Pakboy]

I don't think institutions holding Bitcoin are anything to worry about. Because pump and dump has often happened to Bitcoin, so if there is
an institution that sells all the Bitcoin it owns. Then there will be new institutions that buy Bitcoin, after all, there is not only one institutions
holding Bitcoin. And I believe all institutions that hold Bitcoin may not sell Bitcoin at the same time, so I am not worried about the many institutions
holding Bitcoin.

You may not worry now but when there is more institutional money coming in to buy bitcoin and hodling then and there you are going to see that it is a bad thing for the individual investors, pump and dump is not going to be an effective strategy anymore because most people knows that whenever there is a dump, they can just hold it out and wait for the price to bounce back or buy more bitcoin at lower price and hodl. The problem with more institution hodling their bitcoin while accumulating more is that they can contribute to the rise of the price which can gatekeep some individual investor.

[Matimtim]

Yes, there's a big risk if they're holding a big amount of bitcoin but yes there's a big possibilities to them to earn big and make their future better, the only things they need to do is to believe that bitcoin is the gate of success but patience is the key to reach that success.

[EclaireWithLove]

Any person or company that is holding a Cryptocurrency is already at a risk. I mean just holding one is already a gamble. So for a company like this, that stakes a huge amount of money is already risking it. But for sure they have plans for why did that and they have teams and experts that have brainstormed what their plan will be.

[GeorgeJohn]

What is the risk there when it's obvious that every business is under the conditions of risk, using billions into cryptocurrency that it will hold for future purpose, the gravity of it's risk is equal to the level of risk of finance use to adventure into any order businesses, so the institutions of holding Bitcoin or other cryptocurrency should be consider as a factors that is making Bitcoin to go further more than our expectations, so in summary since it's noticeable that many companies are coming into cryptocurrency more especially Bitcoin.

[FinneysTrueVision]

Is is a positive thing that there are now more people participating in bitcoin. The risk from big institutions holding so much could be that we see wealth concentration which could lead to a certain level of centralization. Eventually these institutions might use BTC to pay off their debts or as payment and we will see better distribution. Right now these concerns are just a possibility of what could happen but it is not an immediate threat.

[best123]

Institutions are part of the increased in price we are experiencing today. There is not bad about it. Bitcoin is for everyone. They will manage their asset (Bitcoin) but not yours.

[Bilgent]

The risks for the individuals are also valid for the institutions also. But there is no doubt that these companies are already aware of it and their aim is to make investments for a long-term. We can name them as "whales" also. Their impact on the market is really too big. We are talking about million-dollar and even billion-dollar investments in the end.

[conected]

^ Yes, there could be a risk on the market price because they holding a big amount that anytime they will sell it at once and may have an impact on BTC price. Big investors like big institutions are considered as also whales but they don't have regularly playing the market, the most afraid is when they are all the same in the mind of selling their BTC. I don't know what will happen if most of them believe in FUD and do panic selling, BTC price will probably crashing out that causes a sudden dump. Nevertheless, in my mind thinking that it is impossible to happen, we are already in the middle in the mainstream, and BTC price keep growing.

I don't think that institution is that careless when it comes to selling their asset.  Remember they are here to make profit not destroy their possible source of income.  So I guess having institutions getting into the game simply means a more intelligent decision on the market is at hand since they have to consider a lot of factors that a single person does not necessarily think of when it comes to cashing out their holdings.

- Agree, when determining participation in a certain project, organizations always need to very closely monitor their investment, their decisions may affect the future of so many people, they will not play around and engage based on emotion here, damaging bitcoin is definitely impossible, they can even further stimulate the value of bitcoin based on the amount of capital they own. The only thing that I and many people feel insecure about is our selves, large organizations always show great control over the market, wrongly guessing their thoughts, holding bitcoin will become more dangerous for us.

[Trinx01]

Yes, there is a risk, there is always a risk in hodling a bitcoin, especially those institutional investors as they have bought a huge amount of bitcoin, they are also considered as one of those whales because of hodling that amount, so they may also affect the value of the bitcoin in the future, for sure they will hodl it for years because that is what institutional investors are used to it unlike to those investors who can hold their bitcoin for years because of some personal reasons.

Institutions are part of the increased in price we are experiencing today. It is not bad about it. Bitcoin is for everyone. They will manage their asset (Bitcoin) but not yours.

That is true, that is why we are still in the bull run, those institutional investors have a really big impact on the value of bitcoin. Yeah, nothings say that bitcoin is not for everyone, people who want to explore and buy bitcoin are free to do it.

[galestorm]

It is said on the article that institutions and retail buys are balanced, for now it isnt a big risk. However, when institutions start to buy loads of bitcoins, the holdings that they have would be a potential risk to the bitcoin market and that it would result to rehypothecation. Ben lilly even said that he is worried that rehypothecation will take place off the blockchain. It's the non-transparent entities selling or lending the same piece of collateral twice. This type of behavior is what leads to vulnerabilities

[Vishnu.Reang]

^ Yes, there could be a risk on the market price because they holding a big amount that anytime they will sell it at once and may have an impact on BTC price. Big investors like big institutions are considered as also whales but they don't have regularly playing the market, the most afraid is when they are all the same in the mind of selling their BTC. I don't know what will happen if most of them believe in FUD and do panic selling, BTC price will probably crashing out that causes a sudden dump. Nevertheless, in my mind thinking that it is impossible to happen, we are already in the middle in the mainstream, and BTC price keep growing.

The same can happen with large-scale individual investors who are holding large stash of Bitcoin. So why selectively point out the institutions? IMO, the bigger risk comes from individual investors. Institutional investors can afford to hold Bitcoin for 5 years or more. But that may not be the case with many of the individual investors. They may face financial difficulties and may need to liquidate their holdings in a short period of time. Therefore I would say that investment from institutions will help in reducing the volatility of Bitcoin.

[roosbit]

The thing that comes to my mind with institutional investors having a big share of the bitcoin pie is control! Bitcoin being unregulated it's very easy for these guys to manipulate the markets to push out retail traders, if not that they can choose to dump their coins and crash the markets....but that's one side of the coin.

On the other side we could see these guys make the crypto markets less volatile as they would dump less, but whatever we do we need some institutional presence.

[Ridwan Fauzi]

I came across this article about  instituations holding bitcoin what do you think, is it a risk what is your opinion ?
https://cryptonews.com/exclusives/institutions-retail-compete-for-bitcoin-which-is-the-biggest-9695.htm

Depend on your analyst actually, like me who made this situation as a chance to gain profit for short term investment. Yeah, I'll have a prediction maybe will be different from another people there who choose long term investment just because they will think that instutional investor will make bitcoin more popular than before.

But, I just have a little think that instutional investor is quite dangerous especially at this situation. I mean, we are in pandemic where almost economic situation in this world is bad enough. So as they will find a temporary place to store their money rather than to store their money in fiat which is vulnerable to inflation. When the situstion is back to normal then there will be a chance for them to take their money back and make bitcoin price fall again.

[The Cryptovator]

To be honest this is something that we should worry about, and I wasn't aware of it. I am not expecting any institutional investors will take a stupid decision by offloaded their holding at a time. Because they should know about the risk that would happen after mass sell. Personally, I believe they are very clever and that's why they are accumulating Bitcoin. If they hold for years, there will be many new investors who would make a balance Bitcoin price. But I have to admit, anything would happen in crypto, we can just speculate, we don't know what will happen in the real situation.

[kryptqnick]

If institutions are interested in long-term hodling and their share is indeed increasing (it's unclear whether this trend will persist), it's possible that the price will become more stable. I don't see anything problematic about smaller volatility of Bitcoin, I think it would be beneficial for those actually trying to adopt it as payment. But I'm not sure that the share held by institutions will keep increasing and that the institutions will only be interested in the long-term profit, so overall I don't see reasons to believe that the market is going to change significantly just yet.