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Rise of Institutional Investors

blockchain technology is one of the most fascinating concepts in recent memory in history.

You might have noticed the recent boom in the cryptocurrency space. As you know blockchain technology is one of the most fascinating concepts in recent memory.

In fact there’s an excellent chance blockchain becomes the next stage of the Internet itself in what could be termed a fourth Industrial Revolution.

Now if you’re not quite sure what blockchain is one simple explanation would be as a technology that eliminates the need for a middleman.

To get an idea of how this could change the world let’s consider the impact it could have on just the banking industry. Now this seriously has the potential to impact the banking the same way that the internet impacted media .

Now if we just think about that for a second we know how the internet changed media forever. Now in the banking industry blockchain technology can slash the cost of transactions while speeding up those transactions significantly.

So if a bank can spend less money than it will right that’s a basic fact of business and right now the banking industry is being hit by several things that are definitely hindering its current profit margins. The first thing is it’s dealing with a changing regulatory environment, the regulatory burden is making it harder and harder to do business every year.

The second thing affecting banks right now is the
historically low interest rates.

the averages are still really low around the
world and the lower the rates the lower
the ability to generate healthy profit

finally there is a large scale
movement of digital disruption all over
the world so technology’s changing at a
lightning-quick pace and the banks are
struggling to keep up in fact each year
it’s estimated that businesses around the
world send and receive over 200 trillion
u.s. dollars worth of payments across
multiple international borders now the
transaction fees over all that stuff
averaged out at around 10%
and the delay is usually around one to
three business days for those
transactions to process so that is a
huge amount of money and time on a
global scale annually on top of this
it’s also estimated that banks spend
around three hundred and fifty million
dollars per year in total just to keep
on top of those regulatory requirements
now imagine if all those requirements
were carried out instantly and with
virtually none of the fees that applied
currently the banks that adopt this
technology first will very quickly
attract all the business as the fees
will be reduced
now blockchain could also remove that
whole burden of due diligence with its
you know authentication and submitting
your proof of ID and proof of address
over and over again imagine if all of
that was done instantly and
automatically and this is just one tiny
way that blockchain could change things
in the banking industry alone imagine no
fees or middlemen for buying a house
renting a room and Airbnb borrowing
money trading in the financial markets
and the list goes on and on blockchain
technology can verify each party in the
transaction and cut out the middleman
so no waiting for months to be approved
for a loan on your house and credit
scores and checks a lender will know
nearly instantly your credibility if it
has all been logged on the blockchain so
you can see the tremendous potential for
reducing costs giving people more free
time and dramatically improving accuracy
all of this through smart contracts on
the blockchain in fact this might be one
of the greatest investment opportunities
of this generation now that is the
potential but as we all know crypto
currencies have taken a big dive over
the past six months and have only
started to recover more recently so the
big question is why has crypto started
to recover and is it here to stay so
just as I promised it
all comes down to two words in my
opinion and those words are
institutional investors now I monitor
what big institution investors are doing
for two reasons
credibility and timing credibility first
because I want someone other than me and
preferably someone who has a lot more
money than I do to do their own due
diligence first and determine that a new
technology is credible after all
blockchain is very new and not very well
understood and so I want to be sure that
I’m not getting ahead of myself or in
over my head
secondly institution investors can give
me a sense of timing
after all they want a good deal just
like anyone else and they don’t want to
buy at the top of any market including
crypto the other interesting thing about
institutional investors is that they
often have the courage to buy when the
retail traders are panicking and what
we’ve seen over the past few months is
an influx of institutional interest into
the crypto market which points to a very
bullish future for some specific crypto
currencies it’s also points to why
crypto is on the rise again now now I’m
going to bring up a number of articles
to demonstrate what is happening and to
give you a picture now this one here you
can see is about facebook you see the
headline facebook looks very serious about
its own digital currency seeks to
leverage blockchain technology now this
is really interesting because basically
talking about facebook exploring the
possibility of creating their own
currency something you know that could
be called something like facecoins and
this could become a currency of facebook and then kind of gradually become
the currency of the internet a very
interesting concept that’s such a
massive company like facebook when you think
of all the hundreds of hundreds of
millions of users that Facebook has if
they got a currency off the ground that
could kind of link things in a very
interesting direction and it’s pretty
significant for the industry this
article here you can see traditional
traders and bankers migrating to crypto
now that’s interesting here that a lot
of people on Wall Street hopping out of
Wall Street crypto space whether it’s working on
crypto exchanges or ICOs or the ten
companies working on the technologies
it’s interesting one of the interesting
things about this is the fact that
traditionally Wall Street has been the
kind of poacher of the brains right so
normally people are highly intelligent
will be poached by Wall Street and City
interesting now that crypto is starting
to actually poach from Wall Street
itself just interesting how that’s the
turn to play out this article here again
another talks about another Wall Street
trader move into crypto currency
exchange as those talents continue to
migrate that kind of thing seems to be
picking up speed this article here is
pretty interesting because this includes
an interview with the CEO of NASDAQ okay
which is the big exchange in the u.s.
basically saying that blockchain
technology will play a major role in the
world economy and if you go into the
interview basically talking about the
the kind of importance of the
distributed ledger technology and how
that technology is so good and so much
better than anything we currently have
that the march and the rise of it is
kind of on this almost kind of
inevitable course and the you know the
fact that next few years everything’s
gonna be running distributed technology
it is virtually inevitable very
interesting that someone in such a role
you know the nasdaq CEO will be saying
that they started to go here talks about
billionaire Mike Navagrats launching
the crypto index for institution
investors now this is interesting based
what we’ve just been talking about
because this guy mark Navagrats
billionaire he’s actually made over 250
million dollars from crypto investments
and he’s launching his own index so the
index is basically the top crypto
currencies by market cap and he’s done
this in partnership with Bloomberg which
is pretty interesting because you you
know arguably one of the probably the
biggest institutional research company
on the planet and a billionaire investor
coming together to create an index for
institutional investors like they
wouldn’t be doing that if this thing was
a fad or if it was kind of one of those
things that that isn’t really real or
there was something untoward going on
this just illustrates to me the
of crypto technology and basically how
it’s here to stay and then this is one
of my favorite stories we’ll talk a
little bit more about this in a moment
but the anonymous crypto currency trader
that buys 400 million dollars worth of
Bitcoin now again to me I find this
story interesting because there’s not
that many individuals rocking around
with 400 million dollars in the back
pocket just to take a punt on Bitcoin
right so this has to be an institutional
person that has to be means are the
managing money for a funder it’s got a
family office or or her of course but
basically this is this illustrates a
significant investment into Bitcoin to
the cryptocurrency space and it’s not
just some people on the internet this is
again illustrates to me a significant
investment which you know we expect to
continue and all these things are little
clues to how that stuff works
now all these institutional investors
have basically pushed the price of
cryptos up recently for two reasons
which of course takes us back to our
original two points first they’re adding
a tremendous amount of credibility to
the market this has happened as they’ve
done their own due diligence and they’ve
seen specific crypto assets that have
caught their attention and the second
point is key as well that is of course
timing okay
institution investors have looked at
this big dip in crypto completely
differently than the average retail
trader now many retail traders have
looked at the falling prices and just
panicked right or they didn’t have the
courage in their convictions about the
underlying technology or they were just
out to make a quick dollar and they
didn’t really understand what they were
doing and why now as soon as the price
turned those people panicked and got
taken out the market for a loss and this
phenomenon actually happens a lot
happened when the internet boom were not
happen in the early 2000s there was a
huge initial spike up and then that
massive big retracement now on that
larger tray sment that’s when
institution investors saw excellent
value and brought in the lows and
possibly the best example of this which
have just looked at was the
institutional investor who bought about
four hundred million dollars worth of
as it dipped to 8,500 which of course is
reference in the article just looked at
he then took another position as Bitcoin
rose up to 10,000 and this is the other
value institutional investors give us
it’s the idea of timing because many
institutional investors capitalized on
this recent pullback in crypto now these
are the two words and two big reasons
that crypto has been rising lately right
it’s all about institutional investors
now I operate my own fund and while it’s
nowhere near as big as the institutional
guys we’ve just looked at I always try
and operate on largely the same
principles now a few months ago we
opened a crypto currency mastermind
which allowed anyone joining that to
follow along with our specific
cryptocurrency investments that program
as you now know is closed however since
we launched a few months ago we are now
just around 50% on our initial
investment and are looking to invest
more over the coming weeks and months
but we did this all based on the
fundamentals of the underlying
technology and some of the principles we
just talked about what was very
interesting at the time is that we
received some pushback from a number of
people that thought that the price was
falling and would continue to fall and
they were quite negative and pessimistic
and I do understand that but that is
very much a retail mindset professional
investors look at big dips and pull
backs and then check to see if the
fundamentals are the same if they are
they will often sense an excellent
buying opportunity and jump into the
market so the bottom line on crypto
currencies is that there is still scope
to get into the market but that doesn’t
mean that all crypto currencies will
rise but some of them will definitely
rise now if you’re interested in
investing you need to spend a decent
chunk of time doing your due diligence
and researching in depth now coin market
capcom is probably a really good place
to start as they
have atop the wall the top 1000 also
have many years crypto currencies
located on there you also need to do
some research on setting up an account
at a reputable exchange do your due
diligence on that and don’t forget about
risk management so I hope this has
helped you understand what’s happening
in the crypto space and I look forward
to speaking to you again very soon

Haroun Kola avatar
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My Journey Towards A Bitcoin Standard