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Dan Held, Kraken’s growth lead, announced in a series of tweets that retail investors betting on bitcoin could result in a “more extreme” bull market and milder bear markets than we’ve seen in the past.
Held began his tweetstorm by clarifying that the word “institutions” in the cryptocurrency room applies to financial institutions such as banks, companies that offer services as financial exchange intermediaries, hedge funds, and corporations.
He went on to say that in the last year, a “herd of institutions” have begun to invest in bitcoin. Macro traders such as Paul Tudor Jones, Bill Miller, and Guggenheim have all shown interest for bitcoin and have also acquired it. Investment banks, which have previously “scoffed at Bitcoin,” are now joining the cryptocurrency room.
As previously reported, Citibank believes bitcoin has the potential to become the “currency of choice” for foreign exchange, while Deutsche Bank believes bitcoin has become “too essential to ignore” due to its $1 trillion market capitalisation.
Similarly, corporate acceptance skyrocketed last year after PayPal introduced a new feature that allowed users to purchase, sell, and keep cryptocurrency. MicroStrategy has spent over $2.2 billion in bitcoin since then, while Tesla has purchased $1.5 billion and begun accepting bitcoin as a payment form.
Hold went on to say that systemic acceptance is critical because without it, bitcoin would be reduced to being a niche commodity embraced and held by individuals with little to no control over global finance/politics. He went on to say that if bitcoin becomes more commonly accepted as a store of money, it will become more entrenched in our culture.
According to the Kraken executive, institutions control $100 trillion in assets, and “some of it is pouring into bitcoin.” As they buy BTC, the amount of coins available for purchasing reduces. Looking at Coinbase’s S-1 filing, he noticed that institutions began entering the market in the second quarter of 2019 and have been growing their volume ever since.
Held concluded that institutional acceptance could “give rise to a more vigourous bull market than previous ones, and/or a more moderate bear market.” He described Bitcoin as a “monumental accomplishment in its acceptance process” since it is now internationally recognised as a store of value currency.