The bitcoin price has achieved a new all-time high at $8,040, within a week since it dipped below $5,600 on Sunday. Analysts expect the price of bitcoin to surge even further by the end of 2017, upon the entrance of institutional investors and retail traders through Coinbase, CBOE, Gemini, and CME.
Earlier this week, CME Group announced that it will launch its bitcoin futures exchange approved by the Commodities and Futures Trading Commission (CFTC), to address the increasing demand from institutional investors and retail traders for bitcoin.
Today, on November 17, Coinbase, the largest bitcoin brokerage and wallet platform in the world, introduced Coinbase Custody, another bitcoin trading platform for institutional and retail traders. On Coinbase Custody, large-scale investors can invest a minimum value of $10 million in bitcoin.
Brian Armstrong, the CEO at the $1.6 billion bitcoin startup Coinbase, stated:
“We already store billions of dollars worth of digital assets on behalf of our customers. We serve thousands of institutions via our GDAX product, the leading digital currency exchange in the U.S. We’ve raised $216M from venture capital firms and financial institutions like the NYSE/ICE, USAA, BBVA, Westpac, and MUFG. And we have approximately 200 employees working across our three offices in New York, London, and San Francisco with deep industry knowledge.”
Specifically, Armstrong noted that there exists approximately $10 billion in institutional money on the sidelines “waiting to be invested in digital currency.” If tens of billions of dollars flow into the bitcoin market throughout December and by mid-2018, the market valuation of bitcoin will surge substantially, likely to $200 billion in the short-term.
Many institutional investors and high profile traders have invested in bitcoin over the past 12 months through a handful of investment vehicles including DCG’s GBTC and XBT Provider’s bitcoin exchange-traded note (ETN). Upon the launch of CME and CBOE bitcoin futures exchanges, along with Coinbase Custody, institutional investors will be able to invest in bitcoin with ease, by the end of this year.
Increasing Liquidity of Bitcoin
Already, bitcoin is far more liquid than the most liquid stock on earth in Apple. Bitcoin has a daily trading volume of around $5.8 billion, while Apple’s trading volume remains below $4 billion. Bitcoin’s daily trading volume is close to $6 billion without institutional and retail investors in the space. By December, the daily trading volume of bitcoin will be drastically higher.
In addition to the entrance of investors in the traditional finance sector, the adoption rate of major financial platforms is rapidly increasing. Most recently, $15 billion payments app Square integrated bitcoin into its mobile platform.
Analysts expect more financial platforms to integrate bitcoin in the near future, as the market valuation of companies that have integrated bitcoin soared in a relatively short period. Square for instance, experienced a $1 billion increase in its market cap within a five day period, after integrating bitcoin.
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Last modified: May 20, 2020 9:48 PM