As much as COVID-19 as the elephant in the room has many adverse effects on the economy, it has some positive impact too. The pandemic has been an eye-opener to investors looking to diversify their portfolios. Contrary to expectation, people still opted for cryptocurrency and blockchain despite the volatility.
BTC (Bitcoin), which is the king in cryptocurrencies, has been very bullish with its price increasing every day, making it break the limits. The same has been experienced with XRP, ETH (Ether), and many other altcoins.
Centralized investment assets such as stocks have been adversely affected by the pandemic. As a result, investors seek alternatives, hence the raging buzz in the crypto world.
Institutional investors have a big influence on the whole crypto market. They are responsible for the bullish trend in the price of Bitcoin and Ripple in the recent past.
The rise of institutional investors
According to the head of Coinbase institutional coverage, Brett Tejpaul, the interest of institutional investors is on the rise, more than he has ever experienced in his career. He revealed this through the interview he has with Heidrick & Struggles.
There has been an explosion in the interest of institutional assets from April 2020, with the institutional assets increasing from $6 billion to over $ 20 billion as of today. According to Tejpaul, Bitcoin has specifically attracted so much interest with more capital being pumped into it by day.
There is a big batch of customers who are influenced by what their favorite companies are doing. Major companies are tapping into cryptocurrencies. The move by the major bank JP Morgan, Facebook, and PayPal moving to cryptocurrencies speaks volumes on the direction of the market. PayPal is the latest to join the band and is currently working on integrating cryptocurrencies in its portfolio. They all have multi-billion-dollar market caps, and their move will lead to massive growth.
With Bitcoin hitting the $18,000-mark, Bitcoin has made many investors millionaires. There are still many investors who are yet to tap into that space.
According to DeVere Group, a major independent financial advisory firm, a poll they did confirm that up to 73% of participants have already invested in a cryptocurrency or are planning to before the end of 2022. The poll suggests that many are interested in mainly Bitcoin, XRP our Ethereum.
Growth of Bitcoin Whales
The growth is not only in institutional investors but also Bitcoin Whales have grown at a massive rate. That says a lot about where the industry is heading.
According to an analysis done by Glassnode, a company that analyses crypto, Bitcoin whales with more than 1K Bitcoin is facing an upward trend since the pandemic hit. That shows that many high-net-worth individuals are considering Bitcoin to diversify their assets.
Apart from Bitcoin and cryptocurrencies, there is also an increased application of blockchain to different industries. An analysis done by Statista suggests that the blockchain market could surpass $23.3 billion by 2023. From the prediction, the financial sector could account for up to 60% of the total amount. Currently, there are more and more startups that are working on integrating blockchain into different applications and industries. The banking infrastructure is critical as the traditional infrastructure is being wiped out with the technology. Ripple is an example of a platform replacing traditional banking. International remittances have also benefited from the innovation as it is now easier than ever and comes with low transactional costs.