The cryptocurrency industry emerged as a space for retail traders and tech enthusiasts and grew into an entirely new finance sector for companies and institutions in just ten years. With large companies and capital influx into the crypto industry, it has a push in development, touching upon regulations, infrastructure, tools, custody, etc. Institutional adoption of crypto is driving this industry forward the mass adoption. In this article, we will discuss what are institutions in crypto and what they do.
How Do Institutional Crypto Players Work?
Institutions are large financial companies, banks, hedge funds, family offices, trading firms, pension funds, etc., that invest in crypto. The more popular assets among investors are Bitcoin and Ethereum. To buy crypto, investors usually register on an institutional trading platform (like Binance or WhiteBIT) or do it through funds and ETFs.
By coming to the crypto market, investors bring their expertise and significant funds, growing the liquidity and facilitating the market maturity. Institutional participation also stimulates the development of the regulation framework, which is gradually imposed on crypto businesses worldwide.
Institutions with a background in finance (banks, funds, etc.) skillfully analyze the crypto market and find investment potential, assessing the risks along the way. They are essential players in the crypto market, facilitating its growth and legitimacy.
Institutional Investment in Crypto: Prominent Players
Here are some of the most prominent investors in crypto:
- MicroStrategy is a business intelligence, mobile software, and cloud-based services company known for investing in Bitcoin. In August 2020, MicroStrategy made headlines by adopting Bitcoin as a primary treasury reserve asset, allocating a substantial portion of its treasury funds to the cryptocurrency. As of December 2023, the company owns 174,530 bitcoins.
- Grayscale Investments is a prominent asset management company specializing in crypto investments. Grayscale’s investment approach involves holding and securing cryptocurrencies on behalf of investors, providing them with a convenient way to invest in the growing crypto market. Grayscale Investments holds 643,572 bitcoins.
- Square, a financial services company, is actively involved in crypto. In 2013, Square launched a Cash App, allowing users to buy and sell Bitcoin. It owns around 8,027 bitcoins.
Conclusion
Crypto institutional investors such as Square and MicroStrategy have pioneered the new era of crypto adoption, lifting it from retail to institutional level. By doing it, they demonstrate their trust in crypto while growing the market and increasing its liquidity at the same time. The more big players enter the market, the wider adoption it will get.
