Cryptocurrency investors have long believed that the entry of institutional capital into emerging crypto markets would be the event that would trigger the next bull market, with institutions with access to investment capital far exceeding a cumulative group of individual investors.
A recent report from Binance Research – the market research group of the world's most popular cryptocurrency exchange, Binance – explained that about 7% of all cryptocurrencies were already held by institutional investors, which indicated that the cryptocurrency markets still had a long way to go. outperform institutional capital.
Crypto markets still dominated by private investors
The full report contains important information regarding the degree of participation of institutional investors in the cryptography markets.
The report argues that the large number of retail investors currently dominating the markets may be a factor that leads to high correlations between various digital assets, with institutions accounting for as little as 7% of all markets taking into account both Bitcoin and various altcoins.
"From the data collected by cryptofundresearch.com, about 700 cryptographic funds are working … today, which represents a total of assets of just under $ 10 billion … Assuming so much conservative that they all only hold Bitcoin, this would represent an upper limit of only 14%. the total value of the Bitcoin market; If the Altcoins are included in the consideration of their assets … the "institutional proportion" could be lower than 7% for the cryptoassets market, "the report notes.
By comparing this participation with that of the traditional equity market, Binance Research states that the participation rate of the institutions "is only one thirteenth of that of the US market".
Considering the fact that institutions currently represent a tiny part of all markets, it is clear that there is still a significant amount of capital that is waiting to invest.
Cryptocurrency markets may have already found a fund
In addition to a plethora of data regarding the enormous potential of cryptography markets for higher institutional investment rates, Binance's research report also shows that it is highly likely that cryptographic markets have already established a long-term floor.
The report notes that the most recent period of high correlation between Bitcoin and aggregated altcoin markets lasted 90 days until March 14, marking the longest period of "maximum correlation" of crypto-history.
Binance Research indicates that the sentiment of the markets has probably found a local maximum during this period, which means that a "trend reversal can … ensue."
"After emerging from a period of the highest internal correlations in the history of cryptography, the data can support the notion that the cryptomarket has already reached its lowest level," they explained.
The statistics and recent data shared by Binance Research should be extremely positive for investors in distressed cryptography, as they show that markets are still in the early stages of large-scale adoption and that they have already established a fund that will eventually lead to a reversal of the trend.
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