With 2-3 more institutional investors like Grayscale, Bitcoin (BTC) would have no trouble hitting 6 digits. The massive entry of institutions, however, faces many obstacles. BTC must make a name for itself and make people forget certain links it has forged with the darknet and which have tarnished its image.
Silk Road has left its mark
According to the analyst Draper Dragon, Robert li, although a few institutions have acquired large quantities of Bitcoin, many obstacles still prevent them from investing on a larger scale.
When Latin America Bitcoin Conference December 8, 2020, Li indicated that several problems prevent institutions from allocating a significant part of their capital to Bitcoin.
The first is that of the reputation of the Bitcoin, associated for a time with organized crime, terrorists and drug trafficking. Many people consider Bitcoin like a fraud or a scam. The Silk Road was an example of illicit activity facilitated by Bitcoin.
Although the place of Bitcoin is more and more legitimized thanks to the action of certain governments and large companies such as Paypal or Square, the reputation of Bitcoin is not the only deterrent for investors.
Obstacle to obstacle
The second obstacle to mass adoption of Bitcoin by institutions, is linked to regulations. Li believes that some countries are more ahead while others, such as United States, are lagging behind.
Indeed, for United States, spot exchanges are not regulated in the same way as stock exchanges, such as the Nyse where the Nasdaq.
Li also pointed out that the big players are wary of the possibilities of market manipulation, given the past evolution of the price of the BTC.
Institutional investors also fear the volatility of the price of Bitcoin. Added to this is the lack of tools and services dedicated to institutions.
Is the exchange now launching new professional services dedicated to Bitcoin trading for institutions? Will all these obstacles disappear “by magic” if the dollar continues to depreciate, enough to motivate – or oblige – institutional investors to turn to Bitcoin? Bitcoin’s “bad crypto” image will eventually fade over time. 1 BTC at 100,000 USD: enough to rebuild a new reputation and make people forget the adventures of the darknet? Unless the real obstacle is simply a lack of knowledge about Bitcoin.
Litecoin, welcome in the Silver Age