With a current market capitalization of $186 billion, Bitcoin dominates the crypto market. Compared to large companies, national currencies or gold, however, the largest cryptocurrency is still one of the smaller players. A study published on June 2nd, by Coinmetrics, now shows that the Bitcoin volume has increased significantly.
The daily trading volume has increased significantly and Bitcoin is becoming increasingly popular as a trading asset. Is BTC in its current state already ready for the money of institutional investors?
Born2Invest mobile application is bringing all the crypto and business news from trusted sources to a single screen so you can stay on top of the market. The application is aggregating the most important and breaking news from relevant websites, the list is always revised and updated with new resources.
Bitcoin price quoted again above $10,000
On June 2nd, Bitcoin price surprised with a jump above the $10,000 mark. The study published by Coinmetrics now takes a look at the daily trading volume of the largest cryptocurrency.
It is not easy to determine this metric. One of the biggest challenges here is the lack of transparency of stock exchanges and the countless trading places where Bitcoin can be traded.
“The fragmentation of Bitcoin’s trading volume prevents a straightforward recording of market size,” it is written in the Coinmetrics Report.
From the perspective of institutional investors this already represents a major hurdle. That is because investors must first conduct an empirical study of the ecosystem and determine which trading venues and exchanges they consider suitable for their own needs.
Bitcoin volume depending on the markets
The derivatives market generates the largest volume. Even if this sounds negative (or at least inhibiting) at first, there are enough positive signs for Bitcoin. The following statement from the Coinmetrics report underlines this perfectly:
“Bitcoin’s trading volume is growing exponentially and if the trend continues, it will soon reach the level of major asset classes.” A time horizon of about 3-5 years is given here.
Institutions can generate $5 million a day
The average daily trading volume of the US dollar markets for Bitcoin is $0.5 billion. Accordingly, that means €500 million. Since institutional investors (unless they transact futures) use US dollars, this figure is also a good indication for them. After all, the question can be how much money can be invested in Bitcoin on a daily basis.
The report stated that institutional investors could invest around 1 percent, or $5 million per day, in Bitcoin at current trading volumes.
The buying side would most likely not want to invest more than 1% of the daily trading volume. Accordingly, they can currently inject $5 million per day of fresh money into the market without exceeding this limit.
Consequently, with the current growth in volume, Bitcoin is getting ready for institutional investors. The parallel sharp increase in volumes in the derivatives market shows that trading in futures has been relevant and interesting for big investments for some time now.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Energy companies: more than 6 billion for employee severance payments and litigation
Companies in the energy sector are facing a difficult year. Repsol recorded a net loss of $3.9 billion (€3.3 million)...
CrowdFundMe launches CFM board, the bulletin board for buying and selling company shares
CrowdFundMe has launched a digital bulletin board called CFM board. To date, the platform has received positive feedback from users,...
LODE Markets: the digital “Amazon” of Gold and Silver
The on-demand economy has made it easier than ever to acquire products and services with the click of a button....
Will the price of Bitcoin enter the bear market territory?
As paradoxical as it may sound after this week, in the weekly view, the price of Bitcoin is still in...
Bank of Africa is expanding its network of partners
Bank of Africa-BMCE Group multiplies its cooperation projects with leading economic actors. Through these partnerships, the group is strengthening its...
Best of Born2Invest6 days ago
Silver Supply Shortage: What Investors Need to Know
Crowdfunding5 days ago
Mazzanti manufacturer launches a STO after three equity crowdfunding campaigns
Crypto6 days ago
Lothal, the cryptocurrency startup accelerated by Neutron, with technology from Grupo Núcleo
Business6 days ago
A look at the sudden steep rise in interest rates at the long end of the curve