Institutional investors are increasingly entering the market of bitcoin and other cryptocurrencies is the conclusion of the report banking giant Morgan Stanley. While the number of retail investors remains at the same level, bitcoin is becoming a “new institutional asset class”.
In dated October 31, working under the name “Decoded bitcoin: a brief guide and insights”, the specialists research departments of financial institutions have considered the dynamics of leading cryptocurrencies in the last six months and pointed out major tendencies.
In particular, the document highlights the high rate of “transformation” of the asset: defining bitcoin as a “digital currency” and noting that investors fully trust him, the authors acknowledge its rapid evolution. So, from a problem-solving tool of the modern financial system, he has evolved into a separate payment system and, ultimately, became a new class of institutional investment.
How was the process of transformation, according to experts, due to several factors — both positive and negative, the authors considered the influence of aspects such as continuous recording in the register of all transactions, a number of hacker attacks, hardforce, new, cheaper than bitcoin the technology, the volatility of the market and much more.
The current definition, the leading cryptocurrency by a group of researchers, “the new institutional asset class,” and, moreover, according to the report, this situation has lasted for almost a year. Morgan Stanley note: the number of scriptaction running from January 2016 have increased considerably — at present, hedge funds and companies venture capital and private equity keep scriptactive $7.11 billion
Large financial institutions increasingly support this development, as evidenced by the establishment of the custodial service adopted by the company Fidelity investments collected by many companies, including the outcomes of the recent investment round, Coinbase, and defined shifts in the regulatory sphere, for example, the approval of which projects received BitGo and Coinbase.
The authors of the report point to three problems that to date have encountered customers who wish to invest in cryptoprocessor: regulatory uncertainty, the lack of controlled custody decisions and insufficient number of large financial institutions in the space.
Trading with participation stabilio grows
The Bank’s experts separately discuss with stablename, which is a kind of attempt to create some form of price stability. However, they emphasize: it is necessary to pay attention to the growing role of such currencies is bitcoin are increasingly trading against pegged to the dollar asset Tether USDT. Half of all bitcoin trading at the moment — against another digital asset that was observed last year, partly due to the fact that many cryptocurrency exchanges do not accept Fiat currency became a trend.
“USDT has assumed an increasing share of the volume of trading BTC, as soon as the course of cryptocurrency began to decline. This was because many exchanges trade only in crypto-crypto and not crypto-Fiat. Trading crypto-Fiat requires the passage through the banking sector, this is subject to a higher Commission. When the rate of bitcoin has fallen, like the rest of the courses all coin owners want to get out of investments in bitcoin were to switch to another asset, which was closer to the value of the dollar”, — the document says.
Morgan Stanley notes, crypto-startups are now trying to take advantage of the trend, stock exchanges and other companies develop their own stabilini as “part of the next wave of development.” Recent example — coins exchange Gemini and the startup Circle.
However, the authors do not expect to see all the “stable coins” have passed the test of time: the widespread can only get those that have “the lowest transaction cost, highest liquidity and the established regulatory structure”.
Recall that Morgan Stanley announced the possibility of clearing futures contracts on bitcoin and potential development of other areas of the industry back in January of this year.