The long game: Institutional interest in crypto is just getting started

The long game: Institutional interest in crypto is just getting started


The old adage “The crypto market is not for the faint-hearted” was put on full display recently when the total market capitalization of the industry dipped to a relative low of $1.75 trillion on Sept. 20, only to make a strong comeback. Despite all of these fluctuations, however, demand from institutional investors remains strong, with reports suggesting that big-money players continued to recently “buy the dip,” especially on the heels of China’s most recent blanket ban that saw bears take control of the market, albeit briefly.

To further elaborate on the matter, a recent CoinShares report revealed that over the last week of September, digital asset investment products generated $95 million worth of inflows for institutional crypto investment products — with Bitcoin (BTC) and Ether (ETH) leading the way with $50.2 million and $28.9 million worth of inflows, respectively. In fact, on average, the last 30-day period has seen inflows to Bitcoin products surge by a whopping 234% week-over-week.

It also bears mentioning that since April, United States investment bank Morgan Stanley has doubled its total number of Grayscale Bitcoin Trust (GBTC) shares owned, something that came to light when the financial behemoth filed a report with the U.S. Securities and Exchange Commission (SEC) on Sept. 27. 

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Lastly, investment management giant Ark Invest — helmed by CEO and crypto bull Cathie Wood — has also been on a GBTC buying frenzy, with the firm having acquired more than 450,000 GBTC shares via two different separate purchases recently, bringing its total haul to a sizable 8.3 million GBTC shares.

Institutional demand grows

To get a better idea as to how active institutional players have been in terms of their crypto exposure, Cointelegraph reached out to Luuk Strijers, chief commercial officer for crypto options exchange Deribit. He highlighted that large banks like Morgan Stanley, Citi and Goldman Sachs are starting to offer their clients a wide array of digital assets, adding:

“We don’t see them becoming active on offshore derivatives platforms yet. We do, however, see the tier-two firms in size, asset managers and hedge funds becoming more and more active either actively investing/trading or alternatively hedging their VC investments.”

To support his claims, he pointed out that around 20% of Deribit’s options volume is nowadays being transacted as an over-the-counter block, with this number previously hovering around the 5%–10% range. “Due to the size of these transactions, which clearly imply that institutional parties are involved, these transactions

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