Institutional demand for crypto assets is decisively starting to affect the crypto space. Bitcoin remains the “bellwether” of the industry, while data showing that the crypto market has already bottomed out is becoming more explicit, according to Binance Research.
Institutional Appetite For Crypto Is Skyrocketing
The crypto industry will continue to gain momentum over 2019, with the pace of evolution potentially speeding up if crypto asset prices get a boost, according to a new Binance Research report released on May 31, 2019.
The report underscores the all-time high volumes of crypto assets recently traded on the CME Group. Indeed, over USD 1 billion were traded during a single 24-hour period in May 2019.
Specifically, as Bitcoinist reported, the CME Bitcoin futures reached a record high of 33,700 contracts on May 13, 2019. This impressive number of contracts was 50 percent higher than the previous record of around 22,500 contracts that had been reached on April 4, 2019.
This extraordinary flurry of trading reveals that institutional demand is entering the crypto market. Thus, the Binance Research report concludes,
Institutional investors, currently representing (in our conservative assumptions) less than 10% of all long-term investors, are growing their exposure to digital assets and cryptocurrencies, as illustrated by a premium of nearly 40% for Grayscale Bitcoin Trust (GBTC) over BTC spot price at the end of May.
General Public Getting Back Into Bitcoin
Investors’ interest in Bitcoin over-the-counter (OTC) trading is also increasing. According to the report, in May Bitcoin OTC trading surged, reinvigorating interest in the BTC-USD pair.
Moreover, during May, the OTC market saw the participation of investors previously unrelated to the crypto space. The report states,
We have definitely seen more interest from the non-crypto public this month, and hope that the market ‘behaves’ such that the interest continues to build.
The prospects for the crypto industry could be even rosier if projects in the pipeline, either running on private or partially private closed systems, materialize by providing blockchain-based business solutions to everyday users. And the report notes that,
Thanks to their large user-bases comprised of both retail and institutional clients, these initiatives could ultimately benefit the whole crypto asset industry, with new users moving onto decentralized, permissionless and non-custodial platforms.
Furthermore, Binance Research also extensively analyzed changes in crypto asset correlations based on market structure, concluding that “Bitcoin exhibited the highest correlation with other assets…”
This, the report notes, makes BTC “the bellwether of the industry.”
Given Bitcoin’s stellar performance so far in 2019, it also reiterates a conclusion from April 2019, declaring ‘crypto winter to be over.’
Having emerged from a period of the highest internal correlations in crypto history, the data may support the notion that the cryptomarket has already bottomed out.
What do you think about the growth of institutional investors in the crypto space? Let us know in the comments below!
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