Aside from the increasing adoption of cryptocurrencies, experts believe that the entry of institutional investors into the space is another factor that could push the market into a rally. Surprisingly, January’s massive correction and the market’s bearish sentiment since then have not deterred the institutional crowd – investments actually rose in 2018 despite the depressed crypto prices.
Investments From Institutional Sector Spike in 2018
Data from financial giant Morgan Stanley suggest that the crypto market’s slump has not dampened interest from institutional investors this year. On the contrary, the U.S. investment bank and financial services firm noted that crypto assets under management by venture capital firms, hedge funds, and private equity houses rose to $7.1 billion as of October 31, 2018, according to a report by Business Insider.
This represents a massive increase compared to the number of institutional investments less than two years ago. The report stated that total investments from the sector only amounted to $675 million at the start of January 2017. This means that investments rose by a staggering $6.425 billion in just 22 months or a massive 952 percent growth for the period.
Number of Cryptocurrency Funds Rises by 11%
The market correction in January 2018 did not slow down the creation of new cryptocurrency funds. On the contrary, Morgan Stanley estimates that the number of funds that will be created this year will likely surpass 2017’s record by 11 percent. The bank projects that the industry will welcome 220 new crypto funds in 2018 compared to last year’s 198.
Despite this already rosy picture, Morgan Stanley believes that the figures could have been higher if not for three obstacles hindering institutional investor’s large-scale investment into cryptos. The bank identified them as the reputational risk to institutions due to underdeveloped regulations, the lack of custodial solutions for private keys, and the “lack of large financial institutions and asset managers currently invested.”
The entry of institutional investors in masse into the crypto scene has long been predicted as a major game changer for the nascent industry. Some experts such as Galaxy Digital CEO Mike Novogratz even believe that Bitcoin could rally by as much as 30 percent by end of 2018 with their entry. And based on Morgan Stanley’s data, Novogratz’s prediction just might happen.
Institutional Investments in Cryptocurrency Continue to Rise in 2018, Posts 952% Growth in 22 Months was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.