There are signs that cryptocurrencies are increasingly attracting institutional and financial heavyweight investors.
A recently published ‘Digital Asset Investment Report’ by Grayscale Investments LLC, describes how the firm has raised $250 million in a volatile crypto environment.
Grayscale Investments said that this demonstrates a meaningful inflow of ‘institutional’ capital into digital assets and that they anticipate this trend to continue as investors look to diversify their portfolios by adding exposure to digital assets. The report stated that 56% of its investment came from institutional investors.
Although some of the heavyweight traditional investors (such as George Soros) snub cryptocurrencies as a bubble waiting to burst, other financial heavyweights are embracing the crypto-party.
This includes Venrock, the capital arm of the Rockefeller Foundation. It has entered into a partnership with crypto investment fund Coinfund.
What’s behind this increased interest from the institutional and heavyweight traditional investors?
Firstly, the phenomenal returns generated by cryptocurrencies are very difficult to ignore.
Secondly, there is increased confidence in the crypto markets. Once outlawed by countries, governments and regulators as schemes to defraud and promote illegal activities, cryptocurrencies are becoming more and more mainstream.
Governments have taken steps to streamline the crypto markets and increasingly financial regulators are stepping in to provide a degree of regulatory oversight on this digital asset class.
Currently, there are no laws which are specific to cryptocurrencies. However, there is an increased demand for accountability and improved governance. All of this has increased the confidence of the institutional investor.
Crypto-education is another factor to consider.
For many years cryptocurrencies have been misunderstood. However, with the tremendous growth of the global crypto markets institutional investors have spent more time studying these digital assets.
They now understand the crypto markets and their complexities. With education has come the realisation of the potential growth opportunities that cryptocurrencies can offer.
The increasing participation of institutional investors can only have a positive effect on crypto prices moving forward.
It is anticipated that the crypto market will continue to grow, probably at a faster pace than ever before. By the end of 2018, some predict that the growth will surmount that of 2017.
As more and more institutional investors enter the crypto fray, the more rapid the growth will be.
Our existing crypto fund clients certainly see this institutional investor interest in the crypto markets as a sign of potential price performance and as an opportunity for exceptional returns.
Here at IFINA, we are seeing an increased interest and demand for the set-up of crypto investment funds.
Do you need help setting up your investment fund? Email firstname.lastname@example.org and we can arrange a call. If you have any questions, please leave them in the comments below.