Could Wall Street kill crypto?
The crypto market is already volatile; people have seen the dramatic highs and lows that it could go to just in the last two years alone. Wall Street investors have been looking to put their hands in the pot for a while now. But could Wall Street do more harm than good when it comes to the crypto market?
The market is already volatile
In 2017, the value of one bitcoin clocked in around $20,000, whereas now it’s around $3,400 per one bitcoin. The nature of crypto is volatile, so what would happen when Wall Street floods the crypto market using their own monies?
It could go both ways. Wall Street could make the crypto market a bit healthier and increase the value of crypto, or it has the potential of inflating the market and decreasing the value of crypto even further.
However, ten years ago, when bitcoin was first introduced, it was bought and sold with fiat currency exclusively. On top of this, purchasing of it was limited because of the limited amount of supply, and its price rose greatly due to the influx of people buying and not selling. The longer people held onto their bitcoins, the more volatile the market became through the brutal game of supply and demand.
Wall Street could make crypto more stable
As experts point out, Wall Street could actually make crypto more stable by expanding broker trading. Wall Street introduced bitcoin futures, where brokers would be able to dramatically reduce the volatility of crypto markets by giving their patrons the option of speculating the highs as well as the lows of crypto.
Broker trading is different with crypto
For example, Wall Street brokers trade on assets and debt all of the time, but when it’s traditional currency, it’s fairly easy to keep a line of custody to whom the trade belongs to. However, if these Wall Street brokers used crypto to do the same thing, it would be hard to exactly say who had the ownership of the cryptocurrency because of the use of private keys. If one or more people or parties know the private key, then who exactly owns the crypto?
Wall Street could make crypto a household name
Furthermore, it has been reported dozens of times by Forbes, LA Times, Nerd Wallet, MakeIt, and Market Watch, among others, that Millennials are extremely reluctant to invest in the current stock market. Many reports state that this hesitation stems from what happened during the 2008 recession, where a great number of people experienced the lasting hardships first-hand — the hardships created with a participation of central authority, both banks and governments. And that makes it another reason why Millennials are more likely to invest in crypto than the Wall Street stocks. Plus, the gateway of investing in crypto that’s traded at Wall Street by brokers may open up the doors for Millennials to invest in other stocks, too.
On the other hand, a lot of institutional investors are hesitant to invest in crypto due to its decentralized system and ‘uncertainty.’ Moving some crypto in the hands of Wall Street brokers and worldwide-recognized trading companies might actually be a way for that part of investors to have a better understanding of the cryptocurrency as a whole, and therefore to have more access to crypto than before. The availability of cryptocurrency to different types of investors could do the market well.
2019 to become a historic year
Due to so many worldwide regulations presented in 2018, it’s anticipated that 2019 will become a historic year for cryptocurrency worldwide. It went through a huge transformational process, from something that was stored ‘on the back’ of the economy to something directly used by the governments and central banks to resolve their existing economic problems.
From first world to third world, digital currency is changing the way we operate. Take USA, for example. In November 2018, the state of Ohio has officially allowed businesses to pay their taxes in crypto, with other states joining them now, including New Hampshire. Venezuela, being in the depth of the U.S. economic sanctions, has turned to cryptocurrencies as an alternative to the U.S. dollar and even created their own national cryptocurrency, Petro. Iran followed in the footsteps. While lifting the long-term ban on cryptocurrencies this January, they’re also on the path to release their own sovereign cryptocurrency.
With all that being said, cryptocurrencies are not going away, and there’s very little chance Wall Street’s involvement will kill them. On the contrary, it will most likely just make them stronger, moving the whole cryptocurrency industry closer to the mainstream adoption.