Galaxy Digital CEO Mike Novogratz expresses concerns about the lack of institutional excitement in the crypto market. However, he highlights two significant developments in Asia that could change the current situation. Meanwhile, industry experts, including Tommy Honan from Swyftx, believe that Hong Kong’s emergence as a crypto hub could rejuvenate the market.
The broader cryptocurrency market has been described as “lackadaisical” by Galaxy Digital CEO Mike Novogratz, primarily due to the absence of institutional investors’ enthusiasm. In an interview with CNBC on June 1, Novogratz pointed out that while retail buyers provide some stability with their modest investments, the lack of large-scale buyers raises concerns.
Coinshare’s head of research, James Butterfill, recently reported outflows totaling $39 million in institutional digital asset purchases, marking the sixth consecutive week of such outflows. Novogratz, however, identified two significant developments in Asia that could potentially shift the tide.
Novogratz emphasized the significance of the Chinese social media app WeChat now offering Bitcoin price quotes, with a value of $27,138, to its 1.3 billion monthly active users. Given its massive popularity and user base, this integration with WeChat could be a game-changer for Bitcoin.
Furthermore, Novogratz pointed to Hong Kong, where retail customers can now trade cryptocurrencies on regulated exchanges for the first time. This move by Hong Kong signifies an increasing adoption of cryptocurrencies in Asia and presents a unique opportunity for the market.
Tommy Honan, the head of product strategy at Swyftx, also acknowledged the decline in the crypto market’s activity levels among institutional investors over the past month. He also attributed this subdued interest to the impact of rising living costs on retail investors.
Despite the challenging regulatory landscape in the United States, Honan believes that a strong price recovery is on the horizon when major firms reenter the market. However, he emphasizes that for institutional investors to return, there must be clear and sensible regulations in place for cryptocurrencies or a favorable political environment, potentially with a Republican victory in the upcoming US elections.
Honan echoes Novogratz’s sentiment about Hong Kong, emphasizing its potential to attract new investors and provide a strategic location for US-based crypto firms. Hong Kong’s emergence as a crypto-friendly jurisdiction has sparked competition among companies vying for licenses in the region.
While the current crypto market lacks institutional enthusiasm, developments in Asia, particularly in Hong Kong, present promising opportunities to revitalize the industry. As the market keeps a close eye on these developments, the crypto community awaits the return of institutional investors, which could potentially trigger the next bullish phase.
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