ZB Academy:The adoption of Bitcoin by institutional investors has just begun

ZB Academy
4 min readDec 11, 2020

According to a Bloomberg report on №9, Nikolaos Panigirtzoglou, quantitative strategist and managing director of JPMorgan bank, pointed out that the adoption of Bitcoin by institutional investors has just begun. For gold, the adoption of Bitcoin by institutional investors is already very advanced. As institutional investors increasingly favor Bitcoin, gold may lose its appeal in the long run.

The investment bank’s research found that since October last year, 7 billion US dollars of funds have flowed out of gold exchange-traded funds, while Grayscale Bitcoin Trust’s inflow of funds during the same period was 2 billion US dollars. Recently, Grayscale’s assets under management exceeded $10 billion for the first time.

JPMorgan expects this trend to continue and will have an impact on gold prices. According to JPMorgan calculations, gold accounts for 3.3% of household financial assets, while Bitcoin only accounts for 0.18%. Although Bitcoin is the largest cryptocurrency by market capitalization, its current market value is US$343 billion, which is still quite small compared with the market value of more than 10 trillion US dollars in gold. Therefore, the transfer of funds from gold to Bitcoin may bring huge losses to gold and huge benefits to cryptocurrencies.

As of press time, according to ZB.com’s market report, Bitcoin is currently quoted at $17,936, a 24-hour drop of 2.98%, and the highest 24-hour price is $18,490.

The recent developments of large commercial companies in the encryption field undoubtedly support JPMorgan’s prediction.

On the 10th, Fidelity Digital Assets issued a press release stating that Fidelity Digital Assets will allow its institutional clients to use Bitcoin as collateral for cash loans. The company’s president Tom Jessop said that the target customers of this new service are Bitcoin investors, hedge funds, miners and over-the-counter merchants who are eager to convert their holdings of Bitcoin into cash. Its subsidiary Fidelity Investments will receive these pledged bitcoins and BlockFi will lend the funds. The company’s CEO, Zac Prince, explained that the partner of the plan is the crypto lender BlockFi, which will lend out 60% of the value of Bitcoin collateralized by lenders.

Also on the 10th, DBS Bank of Singapore officially announced that its digital asset exchange will open for trading next week. 10% of the shares of DBS Digital Exchange are held by SGX stock Exchange. It will also provide services such as tokenization of securities and other assets and bank-level custody for digital assets.

On the 11th, Massachusetts Mutual Life Insurance Co. will enter the institutional Bitcoin party by investing USD 100 million in Bitcoin and USD 5 million in NYDIG equity. Both plans were announced in the company’s press release issued yesterday. The company’s risk assessment business has a history of 169 years, and it may have a huge impact on investors’ perception of Bitcoin.

Apart from Bitcoin, there are also some new developments in DeFi.

Curv, a multi-party computing custody startup, stated on the 10th that it is working with MetaMask to allow institutional investors to invest in decentralized finance (DeFi) agreements with institutional-level custody options. MetaMask is a wholly-owned product of Ethereum software company ConsenSys. Itay Malinger, CEO of Curv, said that Curv’s customers are professional traders who want to use the protocol for lending, mortgage and trading, as well as exchanges and wallet providers who want to provide integrated access to the DeFi protocol for retail customers. They can get all corporate control, security levels and audit trail services from Curv. But through MetaMask, they can get integration with all DeFi protocols with just one click.

About ZB Group

ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.

ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank.

Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open-source their reports and analysis for the public.

Learn more about ZB Group by visiting www.zb.com.

--

--

ZB Academy

The world’s leading cryptocurrency exchange: www.zb.com. ZB Academy is to provide prefessional blockchain insights.