The cryptocurrency (‘crypto’) market is on the rise. Bitcoin, the main altcoin with a market share of over 60%, has seen its price increase from around $4,000 in April 2019 to over $10,000 in July 2019, despite the recent Congressional hearings on Facebook’s Libra.
In tandem with increasing prices, institutional investors are getting more involved in the market. Last year, we saw institutional investors surpass high-net-worth individuals (HNWIs) for the first time in terms of purchasing cryptocurrencies. It’s fast becoming part of a diversified investment strategy. Whilst there is still a strong UK/US footprint, we’re seeing deals in Switzerland, Hong Kong and Canada.
The speed of professionalization in the cryptocurrency market has ramped up, with much of the recent growth driven by more efficient financial infrastructure. This is helping financial institutions to take a more considered look at crypto, and use it to revamp their portfolios. As of July 2019, the total market capitalization for these digital assets in circulation is just under $300bn. It’s likely that this will rise above $300bn in the near future, though longer-term prospects depend on how the industry adapts to upcoming regulatory framework, with the likes of the Financial Industry Regulatory Authority (FINRA) looking to apply rules that will provide a stable platform to trade digital assets while reducing risk.