Bitcoin, the institutional coin

[Binary Bounties]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

[bitmover]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

I believe it is quite the opposite in the long run. The amount of btc in circulation may increase

Institutions will mostly buy from custodial services (such as funds and ETFs)
Those custodial services may do something like fractional banking ,  saying that they own more than they currently have.

Anyone, even with that "bitcoin fractional banking " the high demand will probably lead the price upwards.

[Mpamaegbu]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Isn't this what we are witnessing already? It plays on the simple economic principle of demand and supply. We can vividly recall how Bitcoin price spiked when Elon Musk bought that over a billion dollar worth of BTC through Tesla. About Bitcoin becoming an institutional coin, that's a given. However, we really can't pin it down to what is driving the price up now — perhaps, either the halving incident late last year or the institutional demand for it. Well, whichever one, it's still a positive for Bitcoin.

[LeGaulois]

I doubt they are allowed (or will) to use this sort of practice, and probably will never be. It could even be considered fraud if you think about it.
They're not a bank and have no banking license or something close to that.
And if the bank can practice the fractional reserve, it's because they invest in the economy IRL. What the custodial services would with it? No idea but surely not investing in the economy IRL.

You were probably thinking about ETF when the person thinks they are truly buying a product while in fact, it's just a promise of future ownership. Well, exactly what we have now with Gold's ETF

[Dave1]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

I wouldn''t categorically call it "institutional coin", even average joe can still purchase it in small units, hold on it for a long time and wait for the perfect time to sell. Bitcoin is also hedge against inflation, and the basic economic principle is apply: law of supply and demand, less supply more demand = increase in price.

[blockman]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars.

It isn't just for institutions. It's for everybody and because everyone is free to purchase it, the institutions are joining us.

this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Limited supply, halving makes it scarce and that's what really is going to happen in the near future so save up for yourself while they're keeping it for themselves and their business.

[jonval21]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Bitcoin has never been institutional in nature, the fact that institutions are currently being interested is something else, now what is most seen is investment, but why? Because it has been determined that Bitcoin can be considered by some as a safe haven, for some it is more profitable to leave the investment of gold and put it in Bitcoin.

The new rich have entered and there are still many to enter, those who have entered many have manifested it but the majority who will enter will be anonymous and yes, the more they enter buying, the higher the price will be.

[dothebeats]

You could say that, though there are still a lot of coins in the possession of the common folk, and they'd surely cling to that for as long as they could. While institutions may buy up all the coins they can get currently, the high price might deter them from doing it in bulk, unless of course they are determined to hold and bear the losses when the time comes. Let's admit it, even if bitcoin already proved something in the financial world, there are still doubters that will be questioning the rationality of the purchase, even from the institutionalists.

[mk4]

Not sure what you specifically meant by "institutional coin", but Bitcoin is a protocol/currency that a centralized entity can't force sort of "updates" to, and that's pretty much it. Bitcoin isn't a for-people only currency/asset, it's literally for everyone, and that includes banks and institutions. Bitcoin isn't an "institutional coin" the same reason why the internet isn't called a "institutional internet" just because they also use it.

[hatshepsut93]

Even the recent data showed that retail interest in Bitcoin is as strong as the institutional one. I just don't see how Bitcoin will become "institutional instrument only", unlike gold it's quite easy to buy outside of regulate platforms, so anyone can own it. And it's naive to think that institutions will buy all available Bitcoins, that would send price to millions and even the most hardcore HODLers would cash out some coins, crashing the price.

[Baofeng]

I see bitcoin becoming an institutional coin in the nearest future.

Those heavily institutional money that keeps flowing are not going to trade, they will rather hold in. While retailers will do the opposite, go to exchange whether centralised or P2P and make money. And this will go on. So it's still 50/50 so bitcoin will not become institutional coin as you descirbe.

institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Even if they don't buy bitcoins, nothing can stop the price of bitcoin from going up. As I have said, traders are the backbone of the ecosystem.

[LUCKMCFLY]

This reminds me of this guy:


Twitter: https://twitter.com/fintechfrank/status/1377348212487450624

Despite his little joke, I have seen one or another complaining that now Bitcoin obeys a totally speculative system of the market, but is it not better to see bitcoin with a high price? The value of bitcoin is difficult to determine, but at least if it has a number with respect to the dollar or euro that is high, it means that everything is going well, and if institutional investment is entering it is because they have opened their eyes, adoption is certainly a fact.

[bitmover]

You were probably thinking about ETF when the person thinks they are truly buying a product while in fact, it's just a promise of future ownership. Well, exactly what we have now with Gold's ETF

Well, Gold ETF actually does that. It is called paper gold (you can search about it, tons of articles in the internet), a gold which exists only in paper. Certainly they will do that with bitcoin as well, as they do it with a physical asset.

Like this one on forbes:

The share price tracks the price of gold, and it trades like a stock, but the vast majority of investors don’t have a claim on the underlying gold.

The reason for this is that you can only request physical delivery of metal if you own a minimum of 100,000 GLD shares (most investors don’t: at $1,000 gold, 100,000 shares is more than a million dollars). Even if you do own enough shares, the GLD ETF reserves the right to settle your delivery request in cash.

So why is GLD appealing to investors if you never actually own any gold?
...

Think about it: If you own GLD, you must rely on a counterparty to make good on your investment. If the fund’s management, structure, chain of custody, operational integrity, regulatory oversight, or delivery protocols break down, your investment is at risk.

It all raises too many questions. Can you be sure the bank doesn’t front-run its customers? How safe are the fund’s holdings? Is the fund protected by adequate insurance? Is the custodian bank trustworthy enough to safeguard the gold?

The best reason to own gold is as a hedge against risk. It can be your last line of defense in an economic crisis—a form of wealth insurance, if you will. But since gold ETFs are part of the very banking system you need protection from, you must ask yourself if they serve one of the primary purposes for owning gold.
https://www.forbes.com/sites/oliviergarret/2017/03/22/gld-vs-physical-gold-which-is-the-better-investment-now/?sh=563948fb2a0b

this is similar as well:
https://www.forbes.com/sites/oliviergarret/2017/03/09/3-reasons-why-investors-should-avoid-gold-etfs/?sh=768f364c4dd8

Buying 'paper gold' ETFs could be 'huge failure' if gold is in short supply - Bond King Gundlach


Purchasing “paper gold [ETFs] could be a huge failure in entire gold-delivery system” as there is not enough of the yellow metal to cover all the paper demand, Gundlach said in a Tuesday webcast.

If, after buying a gold-backed ETF, investors might want to get their hands on that physical gold, there might not be any left, Gundlach warned.

https://www.kitco.com/news/2020-04-02/Buying-paper-gold-ETFs-could-be-huge-failure-if-gold-is-in-short-supply-Bond-King-Gundlach.html

Another one:

Why gold-backed ETFs 'have created an illusion'

“Many gold transactions, such as futures contracts, certificates, and ETFs, are nothing more than paper proxies or derivatives of gold. They do not represent legal ownership of gold. These proxies may work as planned during normal market conditions but may fail under stress, when investors need the safe haven of bullion the most. I have always said that if you aren’t paying reasonable insured storage fees for allocated bullion, then in all likelihood you don’t own any gold at all.”

According to the World Gold Council, global gold-backed ETFs added 298 tonnes, or US$23 billion, across all regions in the first quarter of 2020, while total ETF holdings amounted to 3,296 tonnes, representing US$179 billion. The largest ETF is SPDR Gold Shares (GLD) with 1,048 tonnes.
...


He added: “Unlike physical gold, ETFs have counterparty risk, because there’s a possibility that the other parties, such as the Authorized Participant (AP), the trustee or others, may default or fail to uphold their part of the agreement.”
https://www.wealthprofessional.ca/investments/alternative-investments/why-gold-backed-etfs-have-created-an-illusion/329482

Well, there is tons of material in the internet.
I own some Gold ETF. But they are not 100% safe.

Having a Bitcoin ETF is not the same as owing bitcoin, just like owing a gold ETF is not the same as owing gold

[pooya87]

Bitcoin is the "freedom coin" which allows anyone to use it regardless of their background or the amount or the way they are using it. That's the beauty of it.
Whether it is individuals or institutions or whether it is buying $1 or $1 billion won't change  the nature of bitcoin.

If somehow they manage to stabilize volatility, then it is quite possible

They can't because they aren't participating in bitcoin market (ie. centralized bitcoin exchanges) and that is where the price and its volatility is decided.

[TheUltraElite]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

This is a wrong statement but pointing to a correct conclusion. Bitcoin is supposed to be people's currency, not just institutions. But we tend to forget the fact that buying bitcoin means spending fiat and who has the biggest fiat stashes in the world? Not the retail investors but the institutional groups.

Even then the tables will never be turned because no one can take control over bitcoin, it is decentralized therefore not dependent on a specific group. But because its price is determined by the demand supply ratio, the flux in price is variable.

Remember that everyone who buys bitcoin will not hold for long term. Many of them will sell at a target price and many will buy back again.

[Anonylz]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

You are not far from the truth, lately the institutions have shown much interest on btc than previous years, and from the way it has already started,  there is high probability that more institutions will show more interest to be part of the space as we progress into the future,
And this moves will also play a significant role in the price aspect, institutions will most likely acquire btc as a store of value and not for market manipulation like what most big whales does.

[Coinsfera]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Yes, institutional bitcoin interest affects bitcoin positively. It will push up the price and it will make it less volatile. However, as we saw in news, many institutions enlarge their crypto holdings by also adding different coins such as ETH, BTC Cash, Litecoin. When Bitcoin becomes real digital gold accepted internationally, then other coins will get the chance to perform even better. The previous interest in Bitcoin will be transformed to others.

[Kittygalore]

Yes, institutional bitcoin interest affects bitcoin positively. It will push up the price and it will make it less volatile. However, as we saw in news, many institutions enlarge their crypto holdings by also adding different coins such as ETH, BTC Cash, Litecoin. When Bitcoin becomes real digital gold accepted internationally, then other coins will get the chance to perform even better. The previous interest in Bitcoin will be transformed to others.

This is not a positive for everyone, in perspective it looks good because it pushes up the prices but considering that, it means that individual/retail investors is going to have a hard time getting in because it is an expensive thing to do. Hopefully, those things can happen and if there is no way to stop the progress, I guess the only thing that I can say in terms of this is that individuals who want to get in bitcoin needs to get in now rather than later where the prices is far more expensive.

[Kakmakr]

I see bitcoin becoming an institutional coin in the nearest future. institutions are beginning to buy bitcoins in billions of dollars. this will automatically reduce the amount of bitcoin in circulation thereby forcing up bitcoin price.

Institutional buyers are speculators, so with the slightest volatility... most of these institutional investors will dump their coins. This will give an opportunity to the "real" bitcoiners to buy back some of those coins.  

Do you think any institutional traders will hoard coins, when we see a 70%+ correction..like we saw after 2017? (Will never happen, they will drop those coins faster than I will be able to say "dump".

It is a tug of war between the "real" hoarders (Bitcoin Whales) and the Institutional Fiat Whales.  

[franky1]

when the gameplay plays out. it will be a institutional coin

look at the messages the main bitcoin devs say
"bitcoin is not a cash system its a reserve asset"
"to use crypto daily you have to lock-up bitcoin into counterparty contracts and play on other networks with other mediums of exchange"
"exiting the counterparty contracts/networks will be costly. so atomic swap value to an alt"

in the future most 'users'(average joe) wont hoard bitcoin. they will put it into custodian services and lock it to use other networks and at the other network exit.. hand bitcoin to the counterparty while average joe gets handed altcoins

its like the gold reserve era
lock up gold. play around with bankers cheques. and if you want to escape the bank they will give you other currency forms like nickel and brass coins. because getting gold back comes with a fee
bitcoin will become too expensive to use as its own barter currency(like gold became) and other mediums of exchange would be used for the average joe. while the big players hoard the real assets