In order for Bitcoin to continue to develop, the necessary infrastructure must first be established.
Source: newsbtc, compiled by the Bluemountain Labs team.
Nikolaos Panigirtzoglou, managing director of JP Morgan Chase, said that CME bitcoin futures contract activity has increased over the past year. This indicates that demand for BTC and new options contracts is high for the dominant cryptocurrency.
Institutional demand for Bitcoin is critical in the long run
Without institutions, the cryptocurrency market has grown for most of the past eleven years.
The 2017 bull market was mainly driven by retail investors in major markets such as the United States, South Korea and Japan. Until 2019, with the advent of regulated custody services and futures products, institutions began investing in Bitcoin.
Until 2019, there are no suitable channels for viable options for qualified and institutional investors to enter the cryptocurrency market.
Over the past 12 months, the participation of companies such as Bakkt, CME, and existing exchanges such as Coinbase has significantly strengthened the institutional infrastructure supporting Bitcoin.
Before CME Group launched the new Bitcoin option plan, Panigirtzoglou emphasized that the futures market has been “extraordinarily active”, which indicates that investors “highly expect”.
The sharp increase in bitcoin trading volume in the futures market is in line with the continuous increase in positions throughout 2019.
Institutional demand is critical to Bitcoin’s long-term growth and price trends, as it removes the dependence of assets on retail investors.
As Coinbase CEO Brian Armstrong said, it has introduced Bitcoin to a broad investor base that has more wealth than individual or retail investors.
Armstrong said: “About 90% of funds are locked in institutions, so this could drive a lot of demand for crypto assets.”
Improve the image of Bitcoin
Increasing demand for bitcoin by institutions may further strengthen the image of bitcoin as a major value store along with major hedging assets such as gold.
Judging from market value and other indicators, it is too early to identify BTC as a safe-haven asset. The lack of clear or anti-correlation with traditional markets also makes it more difficult to classify BTC as a safe-haven asset.
However, the growing demand for BTC from accredited institutional investors will help Bitcoin develop better and make it possible to grow into a safe-haven asset in the long run.
JP Morgan Chase: Report shows demand for Bitcoin is rising for institutions
As the CEO of Xapo stated, “As a global non-political value and non-political standard settlement method, Bitcoin may be better than gold and the U.S. dollar because Bitcoin will never exceed 21 million And unreviewable. “
In order for Bitcoin to continue to develop, the necessary infrastructure must first be established, and for this, the continued growth of institutional demand is essential.