This week’s Coinbase $85 billion initial public offering (IPO) is a major milestone for crypto. We were in the midst of an institutional adoption cycle but the Coinbase IPO is likely to drive the adoption momentum higher.
Institutional adoption is happening. And it’s working out extremely well for the early firms. It comes to no surprise that Fidelity, the biggest asset management company on the planet with $4.9 trillion in assets under management has got a big institutional Bitcoin division.
Bitcoin is still in the adopter phase, which means it still has quite a way to go, assuming we head for mainstream adoption. But Bitcoin adoption has hit a tipping point and investors don’t want to sit on the side lines. It’s the digital gold assumption that drives Bitcoin higher, which is the consequence of low interest rates and mad quantitative easing.
As is the case with most new disruptive technologies, the world’s never seen anything quite like crypto. There’s still quite a bit of scepticism to overcome. But if a lot of these new institutional buyers are long-term buy and hold investors it bodes very well for long-term prices and stability. Of course, never forget, this is crypto! Anything can happen. But the risk/reward ratio looks very attractive.
Sven Franssen