Seeing the historic rise f from under $1,000 to almost $20,000 in 2017, Bitcoin, the largest cryptocurrency bitcoin ended up at $3,000 at the end of 2018. It was indeed a big shock to big investors who bought it at its peak time of popularity and now their investment shrink by 85%.
In 2019. However, slow and steadily the price has risen by over 300% and recently back to over $10,000.
Some reports have indicated that large institutional investors and funds could be the driving force behind the current improvement. Also, some people put forward the idea that the recent rally could not be sustained depending only on Bitcoins early adopters. For more information visit https://bitcoinprime.io/.
It is true when you invest in any crypto it is not like investing in a usual asset. It is popular for its high volatility and for being speculative. It is all time facing new and new challenges like valuation methods, technical due diligence, custody, and liquidity. It would be a good step if large institutional investors such as hedge funds, banks, family offices, and endowments start introducing the same products services as they are introducing in other asset classes.
This massive amounts of capital would be quite helpful to take crypto back to its all-time highs and far beyond it. Let us see how the companies providing products and services could help hedge funds, banks, endowments, and family offices invest in crypto.
Research and education
The practice and procedure of investing in cryptocurrencies are widely different from investing in commodities, stocks, or currencies. It needs different kind of constancy and deep analyses. It requires a concise evaluation of blockchain technology and economics as these are not commonly accepted valuation methods. You can easily find out many companies that educate investors about crypto assets.
There are many equity research firms On Wall Street. They are the experts to conduct extensive due diligence and financial analysis on public companies. So these analyses are very beneficial for the investors to make more educated investment decisions.
Delphi Digital and ARK Invest are two renowned names as investment research firms in the crypto space. They serve you with specialized expertise in crypto assets.
On-chain and exchange analytics
The companies like Messari, Nomics, Chiananalysis, Adaptive Capital, and Digital Asset Data are used to get metrics on on-chain and crypto exchange activity. Like Willy Woo which is a partner at Adaptive Capital, Informs about bitcoin’s network value and the transaction value flowing through the blockchain. So it helps us to observe when the asset may be over or undervalued.
News and media
You will also find several media companies that regularly provide news updates and analysis on traditional markets. A number of the excellent podcasts are also tailored towards institutional investors, including Base Layer by David Nage, Off the Chain by Anthony Pompliano, and Chain Reaction by Tom Shaughnessy.
The traders involved in buying, selling, and managing cryptocurrencies face a number of challenges. Any crypto user has to hold his private keys to the wallets to make transactions and access crypto assets. These private keys are very difficult to memorize and can be stolen or hacked. You have the option of online wallets and exchanges but there have been many cases of hacking and news about security flaws are alarming. This keeps the less risk-tolerant investors on the sidelines.
You will never wish to invest in an asset and then have it get lost or stolen. Tere are custody companies that provide storage and security services for cryptocurrencies. A lot of advancements have been done in this sector. We find Fidelity a digital asset group providing excellent custody and execution services. Other platforms including BitGo, Coinbase, KingdomTrust, and Ledger are also serving in this connection.
There is a system named proof of stake which is mainly used to verify transactions on a blockchain. The cryptocurrencies having proof of work system, step forward to validate transactions and creates new blocks. As a user performs computational work, a proof of stake system validates transactions and creates new blocks that are entirely based on the amount of the cryptocurrency that the user owns. It has been revealed in a report that about 25% the total cryptocurrency market will use proof of stake as a security model by the end of 2019. So it is indicating that owners of proof of stake cryptocurrencies can easily participate in governance and collect staking rewards.
There are also services available like TradeBlock, Lumminia, and Tagomi serving effectively in trade execution, portfolio management, and analytics products built for the needs of large investors.
In the crypto market, you will also see the companies named CoinList and Republic. These are very helpful to investors and filter through all the noise and find the best investment opportunities.