Opinion: With Effects Of CME And CBOE Still Unclear, Is Cryptocurrency Market Ready For Big Boyz?

institutional investors
institutional investors

Opinion: With Effects Of CME And CBOE Still Unclear, Is Cryptocurrency Market Ready For Big Boyz?

The tax season is here and the cryptocurrency market is bleeding. Though there might be some ups and down in its journey, the crypto market will be experiencing black clouds at least until the period of taxation is over.

As we reported in our taxation article, with the US households having about $25 billion of capital gain tax liability to be paid to the IRS and cryptocurrency exchanges pressuring a sell out in order to pay their taxes, the market will see a downfall.

Crypto investors selling out, institutional investors buying in

The usual sentiment in the cryptocurrency market towards the buy and sell is, buy when the prices are low and sell when the prices are high.

Currently, the market is experiencing the price dips but despite the buying/selling trend, the crypto investors have to sell out their cryptos in order to get the funds to pay their taxes which is also the reason for the dip.

With the bitcoin price at $6,765, ethereum at $395 and a similar downward move into the entire cryptocurrency market, this is a great opportunity for the institutional investors to break an entry into the market.

Wall Street giants like John D. Rockefeller and George Soros have reportedly already started investing in the digital currency market. With such big names entering, the cryptocurrency market would be seeing a huge influx of funds that these big names will bring with themselves.

Also, read: Predicting The True Value Of Bitcoin With Metcalfe’s Law

Institutional investors interested in leveraging price volatility

By the time the taxation season is over, the taxes would be all paid and institutional investors would have already made a footing in the virtual currency market. This would drive the prices to new highs, sure, but a point worth noting here is that one of the most attractive features of bitcoin over any other cryptocurrency is its price volatility.

Price volatility is a factor that rakes in big and fast bucks. Those investors that play on price volatility are often those that are here to purchase bitcoins only to get them converted into fiat and earn some fast and easy money.

Another point worth mentioning is the stock market, unlike crypto, doesn’t hold this much volatility, not to mention if the price of stocks drops down in a similar fashion as bitcoin, the entire stock market and wall street will be devastated while creating an uproar of unimaginable levels.

This is certainly a point of attraction for the institutional investors that presents them with a lucrative current market scenario when the prices are low. But there is no guarantee that these investors will be in for a long run.

The institutional investors are coming in to leverage on the price volatility factor of the cryptocurrency market which will get a new high in the crypto prices but at the same time contains the high risk of losing those gains when these investors will get on to collect their profits.

With these entries, the market share dominated by retail players won’t be eliminated rather will see a shift in the hands of powerful and big wall street names.

Do you think the institutional investors would trigger a price fall in the long run? Share your thoughts with us!

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Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Author: Achal Arya

I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.

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Achal Arya 204 Articles

I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.

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