Financial institutions are sinking investments into the crypto ecosystem and helping drive the current Bitcoin bull run, according to one crypto insider who has a unique lens on the market.
Oliver von Landsberg-Sadie, founder and CEO of BCB, a cryptocurrency prime broker that caters to institutional investors, tells Coindesk that his company brought nine financial institutions into the crypto world just last month in the United Kingdom. They now have 32 banking and over-the-counter trading institutions on board, most of whom entered the fold this year.
Says the Landsberg-Sadi,
“The 2013 bubble was driven by technocrats and dark web trawlers and the 2017 rally was led by the whims of speculative retail traders.
2019’s growth belongs to financial institutions who are diversifying stale portfolios and finally have the professional machinery to do so…
This is a fundamental shift in client profile compared to last year which was dominated by crypto projects looking for liquidity.”
Rising institutional interest is evidenced in part by record-breaking levels of volume and open interest for Bitcoin futures. The Chicago Mercantile Exchange reported last month that May showed massive growth with 223 new trading accounts, making it the most successful month for its Bitcoin futures product since launching in December 2017.
Kari S. Larsen, a partner at an international law firm Perkins Coie and a former executive at Bitcoin derivatives startup LedgerX, affirms that financial institutions are also supporting blockchain projects that involve commodity trade finance and shipping.
“Exchanges are changing their focus from retail traders to institutional traders, providing such customers better ability to customize the front end of their trading platforms and providing APIs that better suit what institutional traders are used to.”