A fresh wave of institutional investors poses new risks to crypto.
This episode is sponsored by NYDIG.
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In this episode of “The Breakdown,” NLW discusses a fresh wave of investors and their potential disruptions to markets, including:
- Two new major hedge funds, Point72 and Soros Fund
- Inevitable short-term investors as part of market maturation
- Troublesome possibility of regulation forming around institutional trading habits
In early 2020, institutional investors flowed into the crypto space nonstop, including hedge funds, corporate treasuries and insurance companies. This new type of investor changed the space, with surging and plunging prices following news of investors coming and going. Then the flood stopped as the always-controversial Elon Musk’s Tesla balked at bitcoin’s energy consumption and walked back accepting the top cryptocurrency in exchange for the company’s trendy vehicles.
In the last quarter, institutional investors have been stepping back into crypto. Point72, Steve Cohen’s company, stated it would be “remiss to ignore a now $2 trillion cryptocurrency market” and is looking to hire a “Head of Cryptocurrencies.” Besides Point72, internal management at George Soros’ Soros Fund has given the “greenlight to actively trade bitcoin.”
Are these two hedge funds just the tip of the iceberg for a resurgence in institutional investment? How will this new mass of money impact markets and regulation?
Image credit: Sean Gallup/Getty Images Europe, modified by CoinDesk
