There is apathy in the cryptocurrency market, as institutional investors are not showing any activity, says Galaxy Digital CEO Mike Novogratz.
The head of the Australian exchange Swyftx, Tommy Honan, agrees with the opinion that the cryptocurrency market has “exhausted greatly” over the past month, including due to a decrease in activity on the part of institutions.
This may soon change - two important events in Asia may influence this: the emergence of Bitcoin on WeChat and access to trading for retail investors in Hong Kong.
Galaxy Digital CEO Mike Novogratz described the cryptocurrency market as “apathetic,” meaning lacking any enthusiasm. He believes the reason for this condition is a lack of interest from institutional investors.
According to Novogratz, there is relatively little demand for crypto assets in the market from retail investors, which adds some level of stability to the market, but the lack of large buyers is becoming a problem.
“There is constant demand in retail. We see it on all platforms, but there is not much institutional enthusiasm right now,” he added.
This information is confirmed by a report from CoinShares. Every week she publishes information about what changes are observed in the cryptocurrency fund market. So, for the past six weeks we have been seeing an outflow of funds from crypto funds.
The outflow of funds from crypto funds has been ongoing for a month and a half; last week it amounted to $39 million.
According to Novogratz, the situation may soon change - two important events in Asia may influence this. First, the Chinese social network WeChat began indexing Bitcoin quotes in search queries. WeChat currently has 1.3 billion monthly active users.
Secondly, new rules for crypto trading started in Hong Kong on June 1, which give access to this sector to retail investors on regulated exchanges. Although regulation is considered quite strict, retail access to cryptocurrencies is still perceived as a positive sign. Some experts even express the opinion that mainland China, through Hong Kong, will have access to cryptocurrencies.
The head of the Australian exchange Swyftx, Tommy Honan, agrees with the opinion that the cryptocurrency market has “exhausted greatly” over the past month, including due to a decrease in activity on the part of institutions.
“The level of activity among institutional investors is definitely muted. But not only institutions, but also retail investors have been hit by pressure on the cost of living,” he said, adding that he expects to see a rebound and a strong recovery in prices when large firms decide to return.
Honan echoes Novogratz's view that Hong Kong represents a unique opportunity for the crypto market, bringing in a new wave of investors as well as offering US firms the opportunity to launch their businesses in the region.
“If mainland China uses Hong Kong as a test bed for the secure integration of cryptocurrencies, it will be a strong tailwind for the market. We were all looking in the West for the next bullish trigger. Perhaps we should have looked East,” he added.