{"id":122175,"date":"2020-11-28T20:37:00","date_gmt":"2020-11-28T17:37:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-institutions-suddenly-give-a-damn-about-bitcoin\/"},"modified":"2020-11-28T20:37:00","modified_gmt":"2020-11-28T17:37:00","slug":"why-institutions-suddenly-give-a-damn-about-bitcoin","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-institutions-suddenly-give-a-damn-about-bitcoin\/","title":{"rendered":"# Why institutions suddenly give a damn about Bitcoin"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a279d5626ebc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a279d5626ebc\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-institutions-suddenly-give-a-damn-about-bitcoin\/#Bitcoins_borderless_network_and_blockchain_technology\" >Bitcoin\u2019s borderless network and blockchain technology<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/why-institutions-suddenly-give-a-damn-about-bitcoin\/#The_introduction_of_quality_custody_solutions\" >The introduction of quality custody solutions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/why-institutions-suddenly-give-a-damn-about-bitcoin\/#Institutional_demand_for_Bitcoin\" >Institutional demand for Bitcoin<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/why-institutions-suddenly-give-a-damn-about-bitcoin\/#The_proof_is_in_the_numbers_as_institutional_investors_come_for_crypto\" >The proof is in the numbers as institutional investors come for crypto<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Why institutions suddenly give a damn about Bitcoin <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTEvNDYxYmIwYTMtMTc1Ny00MjExLWJlYjMtNzRlYjg4M2VlMDFlLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>Without a doubt, Bitcoin (BTC) has become an increasingly popular asset to own among institutional investors. By the end of the second quarter of 2020, Fidelity reported in a survey of almost 800 institutional investors that 36% owned crypto assets. A separate survey, conducted by crypto asset insurance company Evertas, shared that respondents believe hedge funds will increase their crypto holdings drastically. It also <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.evertas.com\/blog\/research-reveals-institutional-investors\">projected<\/a> that 90% of institutional holders of crypto assets expect to invest even more in Bitcoin this coming year.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Corporate Bitcoin treasuries are here, which can only mean good things<\/em><\/strong><\/p>\n<p>From MicroStrategy and Grayscale to JPMorgan and Goldman Sachs, Bitcoin has solidified its place in investment portfolios as the asset to hold as a hedge against inflation and currency devaluation. However, beyond that, there are real technical reasons why institutional investors are becoming more and more bullish on Bitcoin, with some predicting it will reach $1 million by 2025.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Time is our best friend: Bitcoin\u2019s 12-month trajectory to $100K<\/em><\/strong><\/p>\n<p>While the future value of Bitcoin may continue to be a topic of debate, the reality is that investors and financial institutions now <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/capital.com\/btc-price-prediction-2025\">believe<\/a> \u201cholding BTC might prove to be less risky than not having Bitcoin exposure at all.\u201d In fact, according to a crypto research firm Messari, more than 81,000 BTC belongs to \u201cthe treasuries of publicly traded companies.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">In total 81,154 BTC, or 0.5% of all BTC in circulation is held in the treasuries of publicly traded companies. <\/p>\n<p><a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/t.co\/Rx6Z8a5NqN\">https:\/\/t.co\/Rx6Z8a5NqN<\/a> <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/t.co\/DHB7N2dm8J\">pic.twitter.com\/DHB7N2dm8J<\/a><\/p>\n<p>\u2014 Messari (@MessariCrypto) <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/MessariCrypto\/status\/1326564809207373827?ref_src=twsrc%5Etfw\">November 11, 2020<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>But, what spurred the Bitcoin rally of 2020, and what are institutional investors seeing in Bitcoin now that they didn\u2019t see before?<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoins_borderless_network_and_blockchain_technology\"><\/span>Bitcoin\u2019s borderless network and blockchain technology<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Bitcoin acts as a non-sovereign currency that is uncorrelated with other asset classes. For institutional investors, it serves as a diversification tool to hedge against highly correlated markets such as the S&amp;P 500, Nasdaq and the dollar. Two major areas where Bitcoin and blockchain technologies offer the most value to institutional investors include secure, borderless transactions and access to new opportunities that can\u2019t exist in traditional financial markets.<\/p>\n<p>Bitcoin\u2019s innovative <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> including smart contracts, borderless payments, lower fees and faster, more secure transactions are the catalyst that will prepare us for a future where national currencies break from their current physical form and become digitized.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Bitcoin is the best treasury reserve asset humanity\u2019s ever had<\/em><\/strong><\/p>\n<p>With U.S. dollar inflation on the horizon, notable investors like Ray Dalio and Paul Tudor Jones are also beginning to \u201clike Bitcoin more and more\u201d and have identified it as the \u201cbest inflation hedge,\u201d comparing it to gold and copper. As banks and technology providers continue to invest heavily in research and development projects related to verifying and recording finance transactions, such as JPMorgan\u2019s new business blockchain and digital currency house Onyx, we will continue to see institutions increase their presence within the space.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_introduction_of_quality_custody_solutions\"><\/span>The introduction of quality custody solutions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Custodians are used by financial institutions such as hedge funds and mutual funds, who are obliged to hold clients assets with a professional custodian for regulatory purposes.<\/p>\n<p>Previously, institutional investors were wary of Bitcoin and other cryptocurrencies due to the regulatory environment, and until recently, the wider crypto ecosystem was also severely lacking in institutional-grade crypto asset custodial solutions. With an urgent need for adequate custodians to secure the growing amount of crypto assets and an increase in clarity around regulatory guidelines for operating and investing in cryptocurrencies, a sector of institutional-grade custodian solutions was born.<\/p>\n<p>Anchorage, a newly-launched crypto custody firm backed by Andreessen Horowitz and a number of other prominent blockchain-focused venture capital firms, is one of those solutions. It was incorporated with the ethos to provide a crypto-native digital asset custodian for institutional investors. Bank Frick, a Liechtenstein-based private bank, has made it a priority to offer a range of blockchain banking services, including token launch support, crypto trading and digital asset custody. The regulated bank\u2019s services are targeted at professional market participants and financial inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ries in Europe.<\/p>\n<p>Banks have also received the green light to custody crypto companies. In a note to the public, senior deputy comptroller and senior counsel of the U.S. Office of the Comptroller of the Currency Jonathan Gould <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.occ.gov\/topics\/charters-and-licensing\/interpretations-and-actions\/2020\/int1170.pdf\">wrote<\/a> back in July: <\/p>\n<blockquote><p>\u201cWe conclude a national bank may provide these cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency.\u201d <\/p><\/blockquote>\n<p>This marked a major industry-wide development allowing regulated financial institutions to hold the same safekeeping services previously exclusively held by specialist firms. <\/p>\n<p>Banking custody options coupled with the emergence of crypto insurance companies like Paragon International Insurance Brokers, which was recently integrated into Bitstamps offerings, are providing policies for digital assets such as Bitcoin to be protected both online and offline while covering a number of crime-related circumstances.<\/p>\n<p>The adopted regulatory and custodian solutions provide security for institutional investors who may have otherwise been skeptical. They are also helping hold cryptocurrency exchanges to a higher standard, encouraging them to protect investors\u2019 money from theft or mis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ropriation. This has become an important catalyst for making digital assets more attractive to institutional investors and funds.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Institutional_demand_for_Bitcoin\"><\/span>Institutional demand for Bitcoin<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As the crypto market sees an uptick in institutional investments, with large purchases being completed by more and more firms, it has correlated into a rally in the markets.<\/p>\n<p>According to a report from cryptocurrency derivatives platform Zubr, institutional investors are moving toward <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/blog.zubr.io\/institutional-investors-turn-hodlers-on-bitcoin-futures-markets\/\">holding<\/a> Bitcoin in \u201cphysical\u201d form instead of cash-settled futures. The integration of institutional investors into the crypto ecosystem and their interest in holding is a positive sign for mainstream adoption. The similarities these investors share with holders indicate an easy transition from traditional finance to the digital economy, instilling trust in Bitcoin and representing an understanding and belief in the technology.<\/p>\n<p>Serving both parties is also the high-potential upside that comes with decentralized finance, which has introduced a flow of new business streams, products and services. Services from the likes of Maker and Compound allow individuals to take out loans of any size in a matter of minutes without having to disclose their identity to a third party, while the yields associated with new DeFi products are resulting in gains that are higher than savings accounts, certificate of deposit accounts and other traditional options.<\/p>\n<p>The potential benefits of the DeFi revolution are just one more reason the dynamic of cryptocurrency is shifting into what believers have wanted all along \u2014 a digitized, borderless asset.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_proof_is_in_the_numbers_as_institutional_investors_come_for_crypto\"><\/span>The proof is in the numbers as institutional investors come for crypto<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>According to a recent survey by Fidelity Asset Management, 80% of surveyed institutions find investing in digital assets appealing, while the number of Bitcoin addresses has been steadily increasing. Addresses holding above 1,000 and 10,000 Bitcoins have also <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/studio.glassnode.com\/metrics?a=BTC&amp;category=Addresses&amp;m=addresses.Min10KCount&amp;s=1235088000&amp;u=1601490599&amp;zoom=\">increased<\/a> considerably. Coupled with declining balances on exchanges, this suggests that whales and larger investors are choosing to hold Bitcoin.<\/p>\n<p>Additionally, a report by Big Four audit firm KPMG <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/advisory.kpmg.us\/content\/dam\/advisory\/en\/pdfs\/2020\/kpmg-cracking-crypto-currency.pdf\">found<\/a> that major banks, asset managers and qualified custodians are launching a new wave of institutional-grade crypto products and services. The institutional investments into cryptocurrency confirms trust in the digital asset from a significant place of power.<\/p>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Paolo Ardoino<\/strong> joined Bitfinex at the beginning of 2015 and now serves as its chief technology officer. After graduating from Genoa\u2019s Computer <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">Science<\/a> University in 2008, he started working as a researcher for a military project focused on high availability, self-recovering networks and cryptography. Interested in finance, Paolo began developing financial related applications in 2010 and founded Fincluster in late 2013.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/why-institutions-suddenly-give-a-damn-about-bitcoin\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Why institutions suddenly give a damn about Bitcoin &#8221; Without a doubt, Bitcoin (BTC) has become an increasingly popular asset to own among institutional investors. By the end of the second quarter of 2020, Fidelity reported in a survey of almost 800 institutional investors that 36% owned crypto assets. A separate survey, conducted by&#8230;<\/p>\n","protected":false},"author":1,"featured_media":122176,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-11\/461bb0a3-1757-4211-beb3-74eb883ee01e.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74863,117,73711,70934,4965],"class_list":["post-122175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-cryptocurrencies","tag-business","tag-investments","tag-regulation","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/122175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=122175"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/122175\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/122176"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=122175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=122175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=122175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}