Towards the end of 2020, bitcoin rose in value to reach an all-time high. A huge reason behind this has been the increase in investment from mainstream institutions as well as legacy financial influencers. This change has benefitted not only bitcoin but a host of other cryptocurrencies in the industry.
Various financial institutions in government and on wall street have had a little issue with bitcoin since it came into the scene. However, the success of Bitcoin is measurable in ways that there could be no discredit. Now that bitcoin is taking over the financial industry and winning these big financial giants over, it is taking the clients of some of the most notable trading commodities.
A huge number of investment banks have taken to the idea of crypto and the list of billionaires and prominent tech figures who endorsed this system of transactions as reported by Bloomberg has increased over time leading to the thought that this new relationship between crypto and financial experts is more than just a simple treatment of crypto which is like any other stock they gamble on.
What could this adoption mean going into the future?
The adoption of crypto by financial institutions has resulted in all crypto assets becoming noticeable. When news of an intending ban filled the air in India in mid-2019 it took the finance minister to make an announcement that denies the claim for the situation to calm down. As the price of bitcoin rose in October, their crypto market was flooded with cash.
The market is a very chaotic space. Many players are now predicting the future of crypto and predicting that bitcoin could rise by 25 times its worth in a couple of years. Such a prediction can be easy to disregard. However, the developer activity of crypto assets has been on an increase that all crypto coins are experiencing a performing altitude.
With the adoption of cryptocurrency, things like growth in emerging global markets, booming developer activity and increased institutional adoption suggest that the rise of crypto assets is already having an impact on the financial future. Asides from this current decline in value because of China restrictions, bitcoin will still maintain additional gains for the cryptocurrency space.
User Experience is a Roadblock to Greater Institutional Adoption
With the increased adoption by many financial institutions, what’s still keeping many potential investors away? Do they doubt the implications of a highly volatile crypto market or are there other reasons to justify their resistance?
Bitcoin Equalizer potential clients are resisting because of the highly fragmented nature of the crypto class. They expect the same level of ease delivered by regular fiat currency to be delivered by the crypto exchange which sorts different services such as low latency issues, reliable market data, support of multiple order types, multi-broker sessions, and industry-recognised API for standard connectivity.
Delivering these to customers has been the challenges that crypto exchanges face. Also, crypto exchanges need to work on the needed infrastructure and services that help institutions manage the crypto portfolio and fiat currency between banks, custodians and counter traders. These processes expose clients to unwanted risks and operational burden.
There are also regulatory issues to consider. Policymakers around the world are ordering tight regulations which would make the investment more lucrative. This would mean crypto exchanges collecting more comprehensive market data and trade.
Future of Institutional Adoption
To accelerate more institutional adoption, crypto exchanges must focus more on improving user experience. With that said, investor protection regulations hinder institutional adoption and crypto exchanges must address these issues. To stand out from other exchanges, user-friendly ones should build upon licenses and compliance.
When the major issues surrounding institutional adoption are solved, then crypto exchanges would be able to simplify the trading processes for institutional crypto-asset holders and, I believe, encourage wider adoption.