Don't Panic! Why the Future of the Crypto Market is Super Exciting

in bitcoin •  4 days ago

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The floodgates will open to a massive influx of Institutional money this year, due to more regulatory oversight and secure custodial services. The CTFC Commissioner recognizes the value and "transformative" nature of cryptocurrencies.

According to founder and CEO of Abra, Bill Barhydt and many others, big institutional investors are waiting to enter the cryptocurrency market;

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Firstly, there are welcome signs that stricter regulatory oversight of the cryptocurrency market is being put into place. This is the first measure that institutional money is waiting for, before pouring in the huge sums they have waiting on the sidelines.

The CTFC are aware of the potential that cryptocurrencies have as another asset class and to transform our societies, so they are stepping-up their regulatory oversight in order to root-out price manipulation that distorts the market. To achieve this, the CTFC has subpoenaed Bitstamp, Coinbase, itBit, and Kraken for their trading data. It is the combined average Bitcoin spot price taken from these four exchanges that forms the settlement of futures contracts every month. The CTFC had previously requested trading data from cryptocurrency exchanges in January, which resulted in non-compliance.

This follows on from the announcement that the CTFC and DOJ are investigating to see whether there is any evidence of price manipulation. As stated in one of my previous posts, the "CFTC's jurisdiction is the futures and options markets, it can take action where it sees fraudulent spoofing and wash-trading practices on the cryptocurrency exchanges, just as it does in other financial markets."

Source; https://steemit.com/bitcoin/@sandwichbill/what-exactly-is-the-market-manipulation-the-doj-are-investigating

As I'm sure the learned Steemit community already know, a paper published by the Federal Reserve earlier this year concluded that the launch of Bitcoin futures, in December 2017, had been responsible for the fall in Bitcoin's price since then.

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The second thing that large institutional money is waiting for is reputable and secure custodial services, which Circle is seeking to provide.

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Circle is set to become an OTC exchange for institutional money. SEC approval in the US, would give Circle a credit rating of at least A, since they are backed by Goldman Sachs. Circle could then obtain a custody license, which essentially means in a regulatory and legal sense that Circle have ownership and responsibility for any digital assets that an institution holds with them and institutions will have the assurance that these will be stored in a cold wallet offline, without the risks of being exposed to an exchange hack.

Some of the largest fund managers in the world, such as Blackrock and Fidelity have trillions of dollars under management and they are in the process of employing cryptocurrency traders, so they will pour billions, maybe trillions of dollars into the cryptocurrency market, once Circle has SEC approval, a credit rating and a custodian license.

These large institutions view cryptocurrencies as a new asset class, which will provide higher returns compared to the others. For example, the 66 trillion-dollar equity market may provide a 3% yield on dividends and the 80 trillion-dollar bond market typically pays interest of 2 – 5%.

The importance of a custodian agreement is the reason Coinbase is seeking FSA approval in Japan, which will give them access to huge sums of Japanese institutional money. Once regulatory measures are in place in the US, we can expect Coinbase to follow the same path as Circle, which will be good for ordinary investors, not to mention the NYSE and NASDAQ developments.

This is all part of the mass adoption of cryptocurrencies, which will happen soon, so we shouldn't panic about the current state of the market. The CTFC Commissioner, Rostin Benham, has given us another indicator of the cryptocurrency boom we are about to witness, which explains the CTFC's stance on more regulatory oversight;

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Here's another indicator of what the future holds for cryptocurrencies, a much overlooked quote from the IMF World Bank Conference 2018;

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Sources.png
https://www.ccn.com/cftc-demands-trading-data-from-bitcoin-exchanges-in-price-manipulation-probe/
https://www.cnbc.com/2018/05/07/launch-of-bitcoin-futures-dragged-down-prices-fed-paper-shows.html
https://www.coindesk.com/crypto-startup-circle-seek-banking-license-us/
https://cointelegraph.com/news/getting-into-japanese-market-won-t-be-easy-for-coinbase
https://coincenter.org/link/cftc-commissioner-recognizes-the-transformative-nature-of-cryptocurrency

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2018 the Year of Waiting. Wait for January bonuses, Wait for tax season. Wait for institutional money. When will the waiting stop... better yet wake me up when moon. :P

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There is tangible evidence now that the wait for institutional money will be over soon. For the reasons mentioned in my post, the Wall Street bonuses scenario was always a non starter. The fall in Google trends and the number of DUAs, means that we need this institutional money to get the market going again and then the ordinary investors will come back. We've seen a lot of FUD, but I'm sure once the institutions have a stake in the market that all we'll hear is how wonderful everything is.

exactly the reason why I am not bothered. In fact, ever since consensus, if someone has followed the news - Nomura readying a custody solution, circle applying for trading venue, SEC chairman's comments on bitcoin not being a security and some positive news from coinbase as well, there is no reason why bitcoin should be crashing. And it is. This is most likely a shakeout to get the weak hands to panic sell and for people to go short.

I wrote about these things in a couple of articles. The promise of another asset class with 0 correlation to traditional markets is immense. Bitcoin is inflation proof and finite supply. What is happening in markets is insanely retarded.

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Agreed. I’m sure the Insto’s will be delighted, if they can get into the market at a low entry point. 👍

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or the brokers building inventory for OTC markets. Last month, healthy OTC volumes were reported, possibly institutional interest it there. That get's traded OTC. Short on an exchange, scare the weak hands out, cause prices to drop and buy cheap.

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Well, I just wonder exactly who was buying OTC last month. I agree that somebody was buying the Mt Gox Bitcoins, so that they could dump them on the exchanges near futures expiration times. In my opinion the TokyoWhale dumped these Bitcoins onto the exchanges on somebody else's behalf. What idiot would sell so much Bitcoin on the exchanges and expect to get a good price? All this does is drive the price down and he receives less and less.

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yeah, make it big on futures. although, mt gox guy sold everything on an exchange, allegedly. whether it was him, or someone who bought of him, public at large has to witness and feel the bloodshed. :)

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Maybe the institutions are behind the Mt Gox dumps, so they can keep the price down until they get the go-ahead?

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probably, i think that may be the first dump was his. but then the institutions would have smelled it. and now, its all them. He just cannot be that stupid, and the institutions can't be stupid enough to miss this opportunity.

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Yeah, I think you're probably right.

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I like it and it's been added to my wish list.

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Sorry it isn't the right link. The correct link is here:
https://teespring.com/steem-to-the-moon

I have the feeling you are right and I've felt this way for some time now. But, every time I buy in thinking it is at the lowest it goes lower; so all my money is tied up right now until it all goes back up again. One of the coins I do want to buy into is XRP and EOS because I think these 2 will go right up there. Also I've been trading on IOStoken and find it very robust. Thanks for this article, it reinforces what I'm thinking about it all...

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Thanks for your comments. By rights, we should be at the long term support level for Bitcoin and if it goes any lower, then it breaks market structure, which wouldn’t be a good thing. I don’t think that will happen, but nobody can really say. Until we get a regulatory framework and institutional investors, the market will continue to move up and down within a certain range. Good luck and I also have some IOS 👍

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Thanks bill, let's hope it all works out for the best for everyone of us that invest in it

Completely agree with this post, many people including myself have faith that this is a multi-trillion dollar industry. Best of luck friend.

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Thank you, best of luck to you.

As long as you're gaining BTC, USD doesn't matter. HODL!

Very well researched article. I couldn't agree more. The future is exciting.

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Thanks, get ready for lift off.

Absolutely right crypto currency is the future payment method of goods and services. It will certainly go to the moon. Hold your patience , good days are coming soon.

That sounds great! I will buy some crypto at this low price! I will be RICH :))

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Make sure you add a large chunk of XRP. If any of the cryptos in this market are going to the moon, one of the most likely seems to be XRP.

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Cool!Thank you!

Many persons are now complaining because the market is "red". That's because the don't uderstand how does it work...Instead of complaining the should start to educate themselves. You shouldn't invest your money in something you don't understand...It is truism but many "investors" make that mistakes and later they become "crypto-haters"...
Upvote for you and greetings! :)