Blockchain technologies have proven to be
one of the most important technical advances of our generation, and the crypto
market is also growing in adoption and volume despite bearish trends that often
affect the price of tokens.
The institutions are fully aware of this situation; however, there have never been major institutional investments. The reasons are very diverse and range from legal uncertainty to the high volatility of cryptocurrencies.
Institutions Are Slowly Turning Bullish on BTC
However, it seems that in recent weeks, institutions have changed their minds, opening long positions in Bitcoins, with the confidence to see the market grow.
According to information provided by the CFTC, at the beginning of April 315 long Bitcoin futures contracts were opened in CME. This represents an increase of more than 88% over last week and a complete change of market sentiment.
Also, it is important to compare this data
with the counterparty. Short positions dropped from 241 to 89 contracts, which
represents a decline of more than 63% in one week.
These figures show that an apparent reversal of the trend is likely to be noted, at least in the short term. More data still needs to be correlated to know if institutional investors are bullish in the long run, but an 88% increase in the trend seems to be much more than a simple correction.
Are Institutional Investors Really That Important?
The attraction of institutional investors
could play a critical role in the future of cryptocurrencies. The large volumes
of money handled by these players cause the markets to react as a consequence
of strong institutional activity.
The presence of institutional investors is
so important that some analysts consider that this phenomenon could be the
necessary catalyst to trigger the next bull run.
One of the experts who shares this opinion is Mike Novogratz. As reported by Ethereum World News, in the middle of the bearish streak, the owner of Galaxy Digital explained that the institutions are necessary to activate the bull run that BTC needs (and that was needed in 2018).
“I don’t see us breaking $10,000 by the end of the year but I think [in] Q1/Q2 if the institutions start coming in, we’ll put in new highs,”