News Contents The Value Proposition of Bitcoin in the Present Banking Crisis The present banking crisis has highlighted the value proposition of Bitcoin (BTC), which will eventually “attract more institutions” to the BTC market, according to ARK Invest CEO Cathie Wood.BTC’s Recent Price Increase In an interview with Bloomberg on March 21, Wood discussed BTC’s recent price increase and said its pricing behavior throughout the crisis “is going to attract more institutions.” She continued, “It was pretty educational that Bitcoin reacted so differently from the equity markets, in particular.Institutional Interest in Bitcoin Oliver Linch, the CEO of Seattle-based cryptocurrency exchange Bittrex, believes that institutional interest in Bitcoin may already be here.In an interview with The Wolf Of All Streets on March 21, Linch mentioned that many large banks invested in cryptocurrency.“Institutional investment in cryptocurrencies is a hot topic during current bad market.Every major bank now has a significant cryptocurrency desk, not just for trading but also for collaborations.
However, he claimed that there is still a gap between crypto companies and traditional financial institutions, which has hampered institutional adoption over the past several months.
The two sides are currently “stuck in a bit of a rut,” he added, and the “big change” won’t occur until they cease competing for superiority.“Historically, those big players have been the biggest drivers of innovation.” “Crypto doesn’t compete with Goldman Sachs or with institutions.Whoever can do crypto better wins the race.
How Institutional Interest will Affect Bitcoin’s Price Regarding how institutional interest will affect Bitcoin’s price, Wood said in the interview that ARK Invest’s $1–1.5 million price forecast for BTC by 2030 was based on an analysis of institutional investors’ BTC allocations, which predicts that most companies will allocate between 2.5% and 6.5% to BTC in their investment portfolios.These are the kinds of investments that they would have made in newly emergent asset classes, such as real estate in the 1970s and small-cap stocks in the 1980s and 1990s, continued Wood.
On the other hand, Linch thinks that “aggressive” institutional adoption will happen if possibilities are easier to spot: “I guarantee they won’t object if you show them how it can be done and how it can bring them money.They’ll put everything they’ve got into seizing that chance.Improved Sentiment toward Bitcoin Since the failure of the banks Silvergate, Silicon Valley, and Signature, sentiment toward Bitcoin has improved.According to CoinGecko data, BTC has increased 43.6% since its most recent low on March 11, compared to a 25.3% rise in the whole cryptocurrency market during that same period.Conclusion The present banking crisis has brought the value proposition of Bitcoin to the forefront.As institutional interest in Bitcoin grows, it will attract more institutions to the BTC market.
However, there is still a gap between crypto companies and traditional financial institutions, which needs to be bridged for aggressive institutional adoption to happen.Whoever can do crypto better will win the race, and Bitcoin’s price is predicted to increase based on institutional investors’ BTC allocations..
