Arslan Butt
David Mercer, CEO of LMAX, believes that institutions will still invest in crypto despite the downturn. According to experts in the field, the recent drop in the price of Bitcoin is not a sector-specific issue. Instead, the collapse of all financial markets has created a volatile environment for digital tokens.
The volatility of the cryptocurrency markets makes buying cryptocurrencies risky. Prices could fall further, resulting in a loss on your investment, or they could rise back to where they were previously.
LMAX Group CEO @mercerdavid explains how institutional investors continue to engage in the #Crypto market.
Read more here: https://t.co/JZVjqkw3gr@jacqmelinek @TechCrunch #CryptoTrading #CryptoMarket https://t.co/v0Fy3Qn7De
— LMAX Group (@LMAX) September 16, 2022
According to Coinrule’s co-founder, economic factors affecting other financial sectors are also to blame for the decline in cryptocurrency prices.
In addition to David, Lukasz Wisniewski, a chief economist at Chainalysis, has previously stated something similar.
“Despite the downturn in the cryptocurrency market, institutions are still investing in crypto.”
This is because they see the potential of blockchain technology and want to be a part of it. Institutions also have more experience with this type of investment and know that risk is always involved.
David Mercer’s – Institutions Still Invest in Crypto
LMAX Digital, an institutional cryptocurrency exchange, was introduced by the business in 2018. According to David Mercer, CEO of LMAX Group, institutions appear unconcerned about the fact that cryptocurrency prices are still well below all-time highs.
David claims that institutional investors have not moved an inch when the global cryptocurrency market value has fallen from more than $2 trillion at the start of the year to roughly $1 trillion.
Everyone expected institutions to stop participating after the instability surrounding Bitcoin loan platforms like Celsius and BlockFi, as well as the collapse of the Terra LUNA ecosystem in May, according to Mercer.
On the other hand, institutional participation is unchanged from last year and “may even be greater” today. Mercer also stated that institutions are improving and that the herd is progressing.
Crypto Investments by Big Institutions
The entire cryptocurrency market has been experiencing difficulties since the beginning of this year. Cryptocurrencies have occasionally performed well, but these occurrences are uncommon. As a result, crypto companies are more vulnerable to the effects of declining crypto asset prices.
Despite their difficulties, several institutional and venture investors made significant investments in these companies. These investors include a diverse range of well-known figures, corporations, and massive institutions worldwide.
For instance, Samsung, Alphabet (the parent company of Google), BlackRock, Northzone, Goldman Sachs, JPMorgan, Fidelity Investments, and others were among the institutional investors in crypto businesses.
Despite the cryptocurrency market’s decline, institutional interest in cryptocurrencies remains high. For instance, 69% of surveyed institutions in the United States recommend cryptocurrency to their clients, while 78% do so in Mexico. According to the report, cryptocurrency is supported by 72% and 71% of institutions in Brazil and Argentina, respectively.
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This article was written for Business 2 Community by Arslan Butt.
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