- Retail investors are keener than ever to invest in digital currencies, deVere Group CEO says.
- Institutional investors are waiting for prices to dip a little further and are poised to significantly increase their exposure to crypto when they do.
A temporary slowdown in Bitcoin price could trigger a surge in institutional investment, leading to prices going up permanently, an industry expert said.
“With them [institutional investors], they will bring their enormous capital, clout and expertise to the market, and this will then prove to be another considerable confidence shot for even more retail investors,” Nigel Green, chief executive and founder of deVere Group, said.
Bitcoin, which is up nearly 500 per cent since the rally started in October, has pulled back after hitting all-time price highs earlier this month of more than $61,000.
“Bitcoin has been on an epic rally since last October. Almost week-on-week, the price has been smashing through barrier after barrier, reaching new highs. This momentum came as investors are looking for alternatives to traditional currencies as central banks and governments continue to helicopter new cash into economies,” Green said.
‘Buy the dip’ mantra
Moreover, Green said that as Wall Street giants increasingly pursue crypto activities, and as billionaire entrepreneurs such as Tesla’s Elon Musk and Twitter’s Jack Dorsey pile into the cryptocurrency, amongst other factors.
“This has all spiked the hype in the media and massive interest amongst retail investors, who are keener than ever to invest in digital currencies, dubbed ‘the future of money’,” he said.
However, the momentum in Bitcoin currently appears to be slowing down, with Bitcoin’s recent consolidation sitting around $55,000.
Green said that the current slowdown, together with greater ongoing regulatory scrutiny, can be expected to prompt the herd-like mentality of many inexperienced investors who will now cash-out their Bitcoin, forcing the price temporarily lower.
“And this is when institutional investors, many of whom are just beginning to dip their toe in the crypto water, will likely dive in. They will employ the ‘buy the dip’ mantra.”
Increasing exposure
Last month a deVere Group global poll found that 70 per cent of those Baby Boomers and Gen X respondents are already invested in digital currencies or are planning to do so this year.
At that time, Nigel Green said: “Baby boomers and Gen X, who own most of the world’s wealth, are embracing the cryptocurrency revolution. This will serve to further bolster prices in the market in the longer-term.”
He added that it’s likely that institutional investors are waiting for prices to dip a little further and are poised to significantly increase their exposure to crypto when they do.
“Should this happen, as we expect it will, we know that this will drive prices upwards.”