Rising Institutional Investment Setting Pace For Future Crypto Growth

Financial institutions have begun to enter crypto with a quickening pace, setting the tone for the remainder of 2019 and 2020.

"The 2013 bubble was driven by technocrats and dark web trawlers and the 2017 rally was led by the whims of speculative retail traders, 2019's growth belongs to financial institutions who are diversifying stale portfolios and finally have the professional machinery to do so."

Crypto has been experiencing some of the largest levels of institutional growth as seen with bitcoin futures open interest and volume as well as a number of established banks issuing their own cryptocurrencies on their private blockchains.

"Exchanges are changing their focus from retail traders to institutional traders, providing such customers better ability to customize the front end of their trading platforms and providing APIs that better suit what institutional traders are used to."

Institutional investors rely heavily on regulated products and processes, organizations rely on steady progress on the regulatory front as well as infrastructure improvements, which directly affects the pace of institutional involvement.

The Financial Industry Regulatory Authority, for example, appears to be moving very slowly with broker-dealer applications from companies seeking to provide services supporting security tokens or related crypto products says Larsen.

Facebook's battle with regulators is sure to set the stage for crypto moving forward as the nuts and bolts of the regulatory framework are metered out.

With the potential advantage of on-ramping billions of users to digital assets through its Libra/BTC pairing, it can be argued that crypto poses a threat to traditional finance in a number of ways.

There is a level of finesse when it comes to new markets as regulators scramble to make sense of crypto and how that fits into the current global financial model.

Now above $300 billion, growth seems very plausible, given crypto's recent bullish fundamentals that will also depend largely on how the industry navigates the upcoming regulatory framework.