BAKKT green light!
The by now well-known crypto venture Bakkt, announced recently it can officially launch its bitcoin futures in the coming weeks. Compared to cash-settled bitcoin futures, offered on CME, institutional investors can now end up holding their own BTC. After all, if you don't own the private key to your bitcoin, you simply don't own bitcoin.
The futures on CME were not positive for the crypto industry and community at all, as they opened the door to short-selling practices, in other words manipulating the price of bitcoin without owning any. In my brain that's a scam, but who am I.
Institutional investors start investing in BTC on September 23, 2019
Is it most likely that institutional investors understand that buying bitcoin is buying gold 2.0, a necessary asset investment in a well managed and diversified portfolio. Many fund managers wanted to buy BTC before BAKKT received the green light, but had to wait for the right conditions to be created!
As Wall Street is well regulated this was a challenge but Bakkt Warehouse will offer a qualified custodian service, allowing investors to store their digital assets with a regulated service. This offers a much-needed reduction in operational risks and is the much-needed security layer that these investors demand.
After institutions and financial advisors comes mass-adoption?
People who understand how liquidity is created in a new asset class, probably see the signs that after institutional investors load up on physical BTC, the way to mass adoption will most likely follow! At the present time, it is hard for financial advisors to invest in the crypto market. But like institutional investors, they will use the ETF's to open up the market.
Smart non-institutional money already invested in cryptocurrencies using Coinbase and earlier exchanges, a well as many other 'harder' ways into this vibrant yet young market.
Too late to invest?
Not yet, but don't draw a number to get in line! Once the institutionals and financial advisors start buying we'll see a sharp increase in BTC valuations. Around 10.000 USD BTC might still be a bargain.
Disclaimer: I am not a financial advisor, this article is my personal analysis and you should investigate the market yourself before doing anything stupid!