Are Institutions Your Friend? These days, one of the biggest changes in the crypto world is the entrance of big institutions into the market. There are several reasons why institutions have decided to join the crypto game:
Chasing Liquidity: In recent years, the crypto market has attracted a huge amount of liquidity. Whenever there is a lot of money flowing in, institutions are sure to follow.
Volatility Control: The high volatility of the crypto market makes it appealing to investors looking for significant returns. Instead of putting money into risky stocks, some investors choose crypto. But institutions often step in to manage and control this volatility.
Centralizing Assets: By turning Bitcoin and other cryptocurrencies into more centralized asset instruments, governments can impose taxes on gains and track transactions. This makes it easier to deal with fraud and other issues.
“Imagine playing football with your friends—you might score 20 goals. But in a professional game, goals are much harder to come by.” Similarly, with institutions in the crypto market, volatility will be managed, making it harder for small players to make big gains. The big players will always come out ahead because they buy from you, sell to you, charge fees on every transaction, and control the supply. For these institutions, the concept of loss is almost nonexistent.
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