[ad_1]
A year ago, Bitcoin was the star of Thanksgiving dinner tables across the country. More than 100,000 people created new Coinbase trading accounts in just three days during the holiday week, the company said at the time.
Wall Street also quickly realized its ambitions, working fervently to build a cryptocurrency trading infrastructure.
What's happened since is a brainstorming of a famous Kevin Costner movie series Field of dreams: If you build it, they will not come.
A sharp drop in the value of Bitcoin seems to have wiped out all hope that cryptocurrency will become an accepted asset class. On a peak of 19,700 USD in December 2017, the cryptocurrency has been exchanged at 4,300 USD Friday, a decrease of 78%.
Those who have opened cryptocurrency trading accounts over the last year are under water. And most financial institutions say nothing about their Bitcoin ambitions. The initial offers of coins presented as the most exciting venture capital investments of 2017 have also failed.
Now, Bitcoin is facing an existential crisis: what happens if nobody wants to exchange the product?
The rise of institutional cryptographic transactions should allow Bitcoin to reach new heights. That helped hook the Denver financial consultant, 42-year-old James Brewster, who injected about $ 10,000 into Bitcoin and other crypts. "When the products of the futures contracts were launched, it gave the impression that one could adopt in a massive way," he says. "The assumption was that once the institutions involved more, the price would go up."
The value of Brewster's investments has slowly declined to about $ 6,000 now, and he is less optimistic that institutions will be the savior of crypto. The strange price fluctuations of Bitcoin have convinced him that the market is being manipulated, and he hopes that traditional players will remain on the sidelines. "If this kind of thing happens, no institution with half of the brain will be involved," he says.
The fall in prices has even disenchanted the kind of people who would normally be attracted by the revolutionary promise of decentralized currencies. It was last year that students were fascinated by cryptography, recalls Mark Williams, a professor at Boston University who teaches financial technology. Of the hundred or so students in her class, most chose to research cryptocurrency and blockchain during this semester.
Today, his students have moved on to other projects. "My students far prefer to work now in robotics consulting and peer lending," says Williams. "Something with crypto is Kryptonite."
With Bitcoin investments, students and small investors are of great importance. Its most consistent correlation has nothing to do with financial assets such as stocks, the dollar or gold. Instead, the price is changing along with the search term "Bitcoin" in Google Trends. As the price of Bitcoin dropped and prices dropped, new Bitcoin buyers lost their fascination and the price dropped even more. Without them, Wall Street's efforts become more difficult.
Some of the most prominent crypto-currency investors hoped that the institutional currency could stabilize and grow the market.
"For crypto to fulfill its destiny, for the decentralized revolution to really change the business landscape in America, it takes institutional money," said Mike Novogratz, a Wall Street notable, who now runs a bank. Business focused on cryptography, October. "A market capitalization of two hundred billion dollars will not change the world." He said the market must reach the trillions of dollars before changing the world.
It's not even worth $ 200 billion anymore. Digital coins are collectively valued at $ 140 billion, according to coinmarketcap.com. The market capitalization of Bitcoin had fallen to about 75 billion dollars on Friday. The highest investment in the world is now worth less than tobacco companies
Altria Group
(ticker: MO) or Scotch artist
3M
(MMM).
At the conference at which Novogratz spoke, Fidelity Investments announced that it would begin marketing bitcoin for institutional clients next year and that it would keep digital assets on hold. for its customers – a service difficult to find in the sector. When Bitcoin grew by 10% a day, and traders from well-established Wall Street companies were exploiting cryptography even though some of their bosses had debunked it, this type of service seemed like an intelligent decision. Now it's less clear.
True, some institutional investors have invested in Bitcoin and hedge hedge funds continue to survive. According to Crypto Fund Research, there were 632 crypto funds last week, with only 35 confirmed fund closures this year. Bitcoin futures continue to trade, with
CME Group
of the
futures reaching new highs in volume last week.
However, the comparison of futures with other high volume assets shows that this is a very small decline in a very small fund.
CME
of the
a record 14,490 Bitcoin futures (each valued at five Bitcoins) traded on November 20 compared to 1.58 million oil futures and 307,000 gold futures traded on the same day.
Bob Iaccino, a Chicago trader and entrepreneur, may appear to be the ideal client for an institutional crypto-trading product. He trades several futures products at CME, believes that digital currencies could eventually replace cash, and looks forward to the entry of Fidelity.
But he has never traded his futures on Bitcoins and says he's not sure he knows it.
"Crypts need an adult in the room," he says. "We do not have an adult in the room at the moment."
Write to Avi Salzman at [email protected]
Source link
