As institutional investors are becoming increasingly involved in the cryptocurrency market, “the Wild West days of crypto” are almost over, according to Bobby Cho.
The global head of trading at Cumberland, the Chicago-based cryptocurrency trading unit of DRW Holdings (it is in charge of over-the-counter purchases), says buyers such as hedge funds have replaced high-net-worth individuals as the largest investor in large quantities of cryptocurrencies worth over $100,000 through private transactions.
Selling instead of holding
Cho explains that the big sellers of crypto – the miners – are scheduling regular cryptocurrency sales instead of holding or offloading them when the market rallies. Many miners have also set up liquidity desks and operations.
“What that’s showing you is the professionalisation that’s happening across the board in this space. The Wild West days of crypto are really turning the corner.”
Wild swing in prices has eased
Cho says many institutional buyers have dived into crypto recently because the wild oscillation in the price of cryptocurrencies has eased.
“One of the biggest criticisms of crypto by institutional investors has been the volatility,” Cho adds. “Over the last four to six months, the market has been trading in a very tight range, and that seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space.”