Recently NYDIG did their 2023 Q2 Bitcoin Market Review. You can find a link to that video HERE. I encourage anyone reading this to go and watch it in full as they cover a variety of topics from a myriad of perspectives.
Below though are some highlights from the review with several key developments that professionals in traditional finance should be aware of when looking into the digital asset space.
Institutional Adoption: Bitcoin has witnessed a significant surge in institutional interest and investment. Major financial institutions, hedge funds, and corporations have started allocating a portion of their portfolios to Bitcoin as a hedge against inflation and economic uncertainty thus bringing greater legitimacy and stability to the cryptocurrency market.
Institutions like Blackrock, Fidelity and J.P. Morgan are making great strides into the space with the filing of spot ETFs and offering more options for custody. They aren’t in the business of losing money so those in traditional finance should take note.
Regulatory Landscape: Governments and financial regulatory bodies worldwide are taking a closer look at cryptocurrencies, including Bitcoin. Policymakers are working to establish clearer guidelines and frameworks to address potential risks and ensure investor protection.
Savvy RIAs are keeping a close eye on these regulatory developments, as they can impact the operational and compliance aspects of engaging with Bitcoin. With greater clarity comes greater opportunity.
Technological Advancements: Bitcoin's development community is continuously working on upgrading the protocol to improve scalability, privacy, and security. Notably, the implementation of the Taproot protocol enhances transaction efficiency and privacy features. Keeping up to date with these technological advancements is essential for financial professionals to assess the potential impact on Bitcoin's utility and future use cases.
Integration of Crypto Services: Traditional financial institutions are increasingly offering cryptocurrency-related services to meet client demands. As alluded to above, Fidelity, Schwab and J.P. Morgan just to name a few are looking deeper into how, when and to what extent to offer custodial and OTC services along with futures and options as well.
Bitcoin Volatility: Bitcoin has shown both impressive price appreciation as well as strong swings in volatility over the years. This slight decline trendline in bitcoin’s volatility is likely attributed to its mainstream adoption. With public companies and institutional investors embracing Bitcoin, reducing its reputational risk. As a consequence, Bitcoin is becoming more legitimate in the eyes of traditional markets resulting in more stability. If this trend continues in the coming years, Bitcoin’s volatility would decrease further.
We know there’s so much information about Crypto Assets and lots of investors and advisors are just beginning to gather knowledge on this topic. As Crypto gains adoption as a mainstream asset class, there has never been a more opportune time to get invested. Fortunately, we’ve done a lot of the groundwork. All you need to do is fill out this form to get started.