Why Retail And Institutional Investors In Bitcoin Are Investing Bigtime In The Crypto?
Investing in the crypto market is considered as the best investment option today. Even it is highly risky and unpredictable every type of investor is investing in the cryptomarket. Well, both retail investors and institutional investors are heavily investing in the crypto. There are many reasons behind this but let me make it clear about retail and institutional investor.
Retail Investors and Institutional Investors
First of all, it is important to understand and distinct retail investors and institutional investors.
Institutional investors are the persons or organizations that invest a heavy amount in the market. Generally, pension funds, hedge funds, commercial trusts, insurance funds, fund managers, mutual funds, angel investors, are known as institutional investors. They do not own the money they invest, it’s the money of the public.
Whereas retail investors are individuals or persons who invest in their personal interest. They invest their money through a stockbroker, or agents, or banks, etc. These people invest in getting profit for their own financial goals. Generally, retail investors invest by following institutional investors. Because institutional investors invest money in a heavy amount that moves the price of the asset. Keep reading to know the ways of protecting cryptocurrency investments
Now let us understand why both retail and institutional investors invest heavily in bitcoin as well as in other cryptocurrencies.
Why Investors Investing Heavily in the Crypto
There are many reasons why retail investors and institutional investors are investing heavily amount in bitcoin and other crypto coins. But here I have only noted down the most important reasons.
- The Growth of the Crypto Market
If you look at the history of the crypto market, it is only 10years. But the growth is significant as compared to any other form of investment. The bitcoin revolution was unbelievable in 2017. It has created a record in the history of investment with such high growth in only twelve months. Moreover, the growth is going to be high in the future so retail, as well as institutional investors, are investing in the crypto market heavily.
- Decentralization and Blockchain Technology
Another major reason for investing in the crypto market is the underlying technology. The crypto market operates through blockchain technology which is a decentralized peer to peer public network. This allows the investors to transact the money without the help of a bank or any authorized body. So this is a great thing that they don’t get in real currencies. Further, blockchain technology is one of the most demanding technology in many industries. The future potential of blockchain technology attracts more and more investors.
- Major Global Companies are Involved
Many global companies are also involved in the crypto market. Companies like IBM, Microsoft, Facebook, Walmart, Air Asia, and many more are involved in the cryptocurrency. Even some of the global companies have their own cryptocurrencies and some of the companies are going to create their own cryptocurrencies. This shows that the demand for cryptocurrencies like bitcoin, ether, and other coins is going to increase in the future. The cryptocurrency of Facebook, Libra launched recently in June 2020. It is the highest ever investment by corporates in the crypto community. So there is a high possibility that cryptocurrencies will be the future.
- The Future of Money is Cryptocurrency
According to many financial experts, cryptocurrency is the future of money. There will be fewer physical banks and less usage of traditional currencies in the future. However, the traditional currencies can’t be completely replaced by cryptocurrencies but most of the transactions will be made in cryptos. So the growth of cryptocurrencies in the future is very high.
Finally, all of the above factors attract both retail and institutional investors to invest in the crypto. Well, if you want to invest in the crypto market then first focus on learning the basics of the market. Then start practicing with a demo account or with a little money before investing heavily. Because the crypto market includes high risk due to volatility and speculation. I hope you have understood why the cryptocurrencies are so demanding. Now share your views on this article in the comments.