cryptoknowmics.com
Cryptocurrency and Blockchain have been making headlines for the last year and a half. Some of the world's most famous banks, including Goldman Sachs, Barclays, JP Morgan Chase, and others, are creating their cryptocurrency trading desks. There is a continued interest in the space from institutional investors that want to enter markets with limited liquidity or high barriers to entry. Here is the list of Six institutional Adoption of the Crypto Ecosystem:
- TFC Exchange founded by Michael A. Stollaire and Michael Rock is a project that aims to create a completely transparent cryptocurrency exchange focused on the needs of institutions and high-net-worth individuals.
- LedgerX, one of the first federally regulated exchanges for cryptocurrency, recently raised $11.4 million in an equity sale that included large private investors such as Google Ventures and Lightspeed Venture Partners.
- Gemini Trust Company, founded by Tyler and Cameron Winklevoss, has been granted a BitLicense to operate as a regulated Bitcoin exchange in New York State. The exchange recently added Ethereum Classic (ETC) and surpassed 100 million dollars in total trading volume.
- Coinbase Pro is the cryptocurrency exchange started by Brian Armstrong, CEO of Coinbase, allowing institutions to provide dollar funding for trading in a safer environment. The company has over $20 billion on deposit and has very low latency.
- Bermuda-based DCEX is a crypto trading exchange that has partnered with institutional investors through its new membership program. The company is currently seeking investment from significant capital funds such as Jordan & Co, which manages over US$500 million for its private equity clients.
- KodakCoin is a new cryptocurrency platform that offers a license and protects images using Blockchain. The company recently announced its ICO would be available to qualified investors to raise $40 million.
Why is a Crypto Ecosystem Needed?
The crypto ecosystem is needed because it brings together institutional investors, delivering liquidity to the market. When institutions enter the market, liquidity increases, and interest in cryptocurrency grows. Cryptocurrency gives institutions a way to invest in digital currencies without learning how to use exchanges. Institutional investors are more likely to enter markets with limited liquidity and high barriers to entry.
What are the Challenges Faced?
- The cryptocurrency space faces very high volatility, making it difficult for institutions with strict risk limits. Cryptocurrency is still in its early stages, and the markets are unpredictable.
- Cryptocurrency has a poor reputation because of its association with illegal activity and money laundering. Cryptocurrency remains challenging to use as a trading instrument because many exchanges lack user-friendly interfaces, liquidity, and safety.
- Most exchanges provide no insurance in case of hacks or security breaches that could potentially destroy investor funds. The cryptocurrency ecosystem needs to be seen as a mainstream product by businesses and consumers before it can achieve widespread adoption from institutional investors.
What's the Current Status?
The crypto ecosystem has undergone many changes in the last year and a half. The growth of cryptocurrency markets is just beginning to show signs of reaching maturity. However, it's most likely that the industry will continue to grow exponentially over the next couple of years as institutional investors get more comfortable investing in cryptocurrency and become more confident in its safety. There are also a lot of blockchain projects coming up in banks. We can see private blockchains' development for corporations' specific purposes instead of public blockchains.