With the current rush by institutional investors in the crypto space, many brokerage firms have been forced to align accordingly. This is a no brainer for a Swiss crypto broker AG that had to seek a license that will give it the flexibility of offering complete services to institutional investors. The license was offered by a Swiss financial regulator Finma. Through the license, the broker will be able to do compliance, risk management, liquidity reporting, etc.
Finma gives the license to help institutional clients trade crypto assets. Through the license, the firm has the flexibility to hold funds on behalf of clients. This is very important for institutional investors since many institutional clients cannot hold their funds.
Crypto AG is growing exponentially, and last year it added more than 1 million in assets with its digital assets on the rise.
Switzerland has provided a conducive atmosphere for crypto firms through its favorable regulations. This has led to the rapid growth of crypto firms in the country. Contrary to expectation, the country’s banking system and global peers are still adamant to embrace and offer blockchain-related services for fear of volatility and security.
Crypto AG’s move to get the license is strategic to get large investors’ attention, deal with competition, and bag in the profits.
The current rallies in the crypto space have pushed the price of cryptos up, leading to an increase in demand. Despite the high volatility in the crypto space, many still want to partake in the high profits being experienced.
The number of institutional investors is on the rise as many seek alternative investments other than traditional methods such as stocks. May have likened BTC (bitcoin) to digital gold and thus used it as a haven. Gone are the days where we have quite some investors depending on gold and silver. The pandemic was an eye-opener for many investors as stocks and traditional markets crashed. On the flip side, BTC (bitcoin) and cryptocurrencies were generally performing well. This shifted the interest to the crypto ecosystem. With crucial icons such as JP Morgan investing in BTC (bitcoin), many were confident with the move and thus jumped in the ship.
What does the future hold?
Similar to Crypto AG’s decision to get a license to offer institutional investors more products, the same will be for other brokers. Since institutional investors are here to stay and have a significant impact, it is upon the relevant firms to readjust to meet their needs.
Even though the market conditions are not known, and there is high volatility, institutional investors increase liquidity, making things easier. High liquidity helps to shield against volatility, which affects general performance. With the rise in liquidity and demand levels, the price of BTC (bitcoin) is on an upward trend, which will spur up even more interest.
There is a likelihood that many governments will try to get in the way to tighten up the regulations to track individual investors. With proper regulations in place, more institutional investors will jump onboard as many prefer operating in a regulated environment.