Galaxy Digital CEO Mike Novogratz has described the broader crypto market as being “lackadaisical” — or lacking enthusiasm — due mainly to a shying away of institutional investors from cryptocurrencies.
In a June 1 interview with CNBC, Novogratz said that while the relatively small retail buyers add some stability to the market with their modest holdings, the lack of large-scale buyers is becoming a concern.
“There’s a constant bid from retail. We’re seeing it through all the platforms, and there’s just not a lot of institutional excitement right now.”
The claims echo a May 31 report from CoinShares’ head of research, James Butterfill, which detailed that institutional buying of digital assets saw outflows totaling $39 million as of last week, the sixth consecutive week of outflows.
Novogratz has, however, pointed to two significant developments in Asia that may help shift the tide.
First, he pointed out that Chinese social media app WeChat now offers Bitcoin (BTC) price quotes on its app, something he considers a significant milestone given its popularity. At the time of writing WeChat has 1.3 billion monthly active users, according to data from Statista.
— Qinwen Wang (@Qinwen_Wang) June 1, 2023
Secondly, Novogratz looked to Hong Kong which has now officially begun allowing retail customers to trade crypto on regulated exchanges for the first time, an indication of increasing Asian adoption.
In an interview with Cointelegraph, Tommy Honan, the head of product strategy at Australian crypto exchange Swyftx, agreed that the crypto market has very much “fizzled out” over the course of the last month.
“Activity levels among institutional investors are definitely more muted. But it’s not just institutions, retail investors have been hit in the hip pocket by cost of living pressures,” he said.
As crypto firms are scrambling to come to grips with an ever-more precarious regulatory landscape in the United Stat, Honan still expects there to be a strong price recovery when large firms decide to jump back in.
“Institutions will come back to the market, and when they do, they’ll come back hard. I just don’t expect that to happen in the U.S. until one of two things happens,” he said.
“You either need settled and sensible rules in place for crypto. Or you need the Republicans to win next year’s U.S. elections. Crypto has almost overnight become a crazily partisan issue, which is exactly what the industry didn’t want or need.”
Much like Novogratz, Honan says that Hong Kong presents a unique opportunity for the crypto market, unleashing a new wave of investors into the market as well as offering up a place for U.S.-based firms to set up shop if need be.
Chinese Central Television station has just broadcast news regarding Hong Kong letting people buy Bitcoin, Ethereum, and other coins.
This is huge news! China is waking up to crypto again.
What is happening in Hong Kong is only possible with approval from Beijing. Get ready! pic.twitter.com/Zxdi7UZNHK
— Lark Davis (@TheCryptoLark) May 24, 2023
“We’re watching developments in Hong Kong very closely. If Hong Kong is being used by mainland China as a testing ground for the safe adoption of crypto, it would be a significant tailwind for the market,” Honan said. “We’ve all been looking West for the next bull trigger. Maybe we should have been looking East.”
With Hong Kong now opened up for crypto-related business, a growing number of firms are currently jostling to secure a license.
Sourced from cointelegraph.com.
Written by Tom Mitchelhill on 2023-06-06 20:49:22.