Everyone that’ s been in this space knows about the infamous “institutional investors”. They are like a mythological creature that is supposed to get into the crypto market and make it reach new highs.

However, we have often seen institutions as fairly reluctant when discussing Bitcoin or cryptocurrencies. And that makes sense, since the traditional investment vehicles they play with have much lower volatility and risks.

Notwithstanding that, cryptocurrencies are tempting, since the returns that could be obtained by investing in them have been insane during the past years.

As a result, institutions are in a limbo, divided between their rational and irrational parts. The rational (and old ) part that is like a grumpy grandma: “don’t buy Bitcoin, it is too risky, it’s paper money, it’s volatile and its price is based on nothing! What did I teach you???”; the other side of them knows, deep inside, that Bitcoin and cryptocurrencies (and blockchains) might be the future and they might be risking to lose a great opportunity for profits.

But also, its’ about not being on the wrong side of history.

A clear case is that of James Dimon, that became famous (I mean, he already was… as CEO of JP Morgan) for its declarations against Bitcoin. Fast forward 6 months and JP Morgan is one of the companies that are buying most Bitcoin futures — and they even want to get their own coin.

In fact, the last year saw the launch of the CME Bitcoin futures and many others followed, trying to get their future contracts approved.

Yesterday I came across an interesting graph:

For the first time ever, futures volumes outpaced exchanged volumes, suggesting a rise in institutional interest in crypto.

What does that mean?

Oh well, we are moving past the denial phase of the market cycle. Although the past months were part of a year-long bear market, there were many positive news. More and more companies are getting interested in Bitcoin and blockchain, many others are building products on top of it. I believe the next few months will see more futures being developed and more and more institutions interested in this new investment vehicle.

We’ll see it. Hopefully the institutional interest will be reflected in lower volatility and a greater possibility of development for the space.

What do you think?

Are institutional investors so important?