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Institutional Bitcoin Investing Is Finally Happening

Institutional Bitcoin Investing Is Finally Happening
By Adam Sharp
Date September 3, 2021

Mike Alfred is one of the most influential players in the institutional bitcoin investment space. He founded a company called Digital Assets Data.

His company — which sold institutional-grade crypto data feeds — was acquired by NYDIG, a leading provider of bitcoin software for professional investors. (Read my article “Institutional Investors Likely to Grapple With Crypto FOMO” for more on NYDIG.) 

So when he dropped the following two tweets this week, it was a big deal. On September 1, he posted:

Some big names are likely to announce bitcoin ownership in the near future. I believe this will have a hugely bullish effect on bitcoin. 

Mike followed that bombshell up with another one on September 2.

Institutional adoption is finally happening. JPMorgan, Morgan Stanley and other investment banks are now offering bitcoin investing services to their wealthy clients. And going by Mike’s tweets, there are plenty more to come.

Client demand for bitcoin is simply too high for institutions to ignore. JPMorgan and Morgan Stanley had to partner with NYDIG to offer services to their clients. 

Early adopters like Fidelity Digital Assets, Coinbase, NYDIG and others are already extremely well-positioned to benefit from growing institutional demand. 

In other bullish news, Coinbase is officially adding $500 million in crypto reserves to its balance sheet and will put 10% of its profits into the crypto market moving forward.

And more publicly traded financial firms are adding Grayscale Bitcoin Trust (OTC: GBTC) — a publicly traded bitcoin-backed exchange-traded note — to their balance sheets. Ark, one of the most successful exchange-traded fund (ETF) companies of the last decade, has a $338 million position in GBTC in its Next Generation Internet ETF. 

U.S. Global Investors (Nasdaq: GROW), an investment manager with $4.6 billion in assets under management, recently added GBTC to three of its precious metal and resources mutual funds.

Bitcoin Soaring to New Highs 

I’m quite bullish on bitcoin. While altcoins have been outperforming it lately, bitcoin has performed extremely well over the past year. It has risen from around $10,000 on August 3, 2020 to more than $50,000 today. 

And I suspect we’re just getting started. As I explained in my institutional FOMO article a few weeks ago, institutions that adopted crypto/bitcoin early have done extremely well with their investments and are likely outperforming most of their peers. I think FOMO has the potential to drive a cycle of institutional adoption that could send the bitcoin price soaring to $200,000 in the next five years — possibly sooner.

If these institutions are smart, they’ll average into the market and hold for at least 10 years. That’s the proven recipe for success in crypto. 

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