Institutional acceptance drives BTC rise

Mike Novogratz: Institutional acceptance drives BTC rise

According to the Galaxy Digital boss, institutions are currently more likely to be able to buy bitcoin that are currently in circulation. This continues to drive the price up.

Galaxy Digital founder and CEO Mike Novogratz believes institutional investors are driving the current bitcoin bull run.

In an interview with BBC World News, Novogratz said governments around the world are printing money and „devaluing fiat money“. While this is driving the current Bitcoin (BTC) Crypto Cash bull run, institutional players getting into crypto is making the bigger difference. The CEO of Galaxy Digital said large firms have changed their attitude to cryptocurrencies in the last three years. This could have an impact on the range of coins available.

„Now we see bitcoin being offered and bitcoin being sold at companies like PayPal (with 340 million customers). Also at major insurance companies in the United States,“ Novogratz said. „As institutions get on board, there’s just not a lot of supply anymore. There are a lot more than 21 million millionaires out there.“

Fun on the BBC.
– Mike Novogratz (@novogratz) January 3, 2021

Macro investor Raoul Pal agreed with Novogratz and shares his optimistic sentiment. He said he believes it is possible for bitcoin to reach „between $400,000 and $1.2 million“ by the end of this year if the trend continues. Pal said in November he held 98 per cent of his liquid net assets in BTC and Ether (ETH). However, he added that he „still owns enough“.

Novogratz also explained what percentage of their portfolio he thinks investors should invest in Bitcoin

The CEO of Galaxy Digital said bitcoiners should invest up to 3 per cent in BTC and hold it for five years. However, last month he recommended new investors invest 5 per cent in BTC because „Bitcoin is not falling back to zero.“

Many large institutions entered the crypto space for the first time in 2020. Business intelligence firm MicroStrategy announced that it had bought $425 million worth of BTC. This investment is now worth more than US$1.2 billion. The firm later bought on a decline and increased its BTC holdings again. In December, Massachusetts insurance company MassMutual bought US$100 million in BTC for its general investment account.

At press time, Bitcoin was at US$33,727, but it is currently fluctuating. The crypto-asset has repeatedly reached new all-time highs in recent days.

Bitcoin, cryptocurrencies and tokens: a taxonomy of the new economy

You do not mix apples and towel s – There are 2 years of this , I proposed to you my attempt to develop a typology of tokens to better define and understand the digital assets. Since then, water has flowed under the bridges. Shitcoins have collapsed, exchanges have been hacked and others have taken their respective places within the crypto ecosystem. As the crypto-asset market has changed significantly, I am offering you a new classification of digital assets.

Le Token Classification Framework

Since the emergence of Bitcoin Formula and the crypto-assets that followed, the term most used to designate them remains “cryptocurrencies” . Among them, bitcoin is the asset that has received the most attention.

Cryptocurrencies, crypto-assets, tokens or securities?

Bitcoin is strictly speaking a cryptocurrency , but not all digital assets fall into this category. The majority includes tokens . Semantically speaking, the most appropriate term to define this new class of assets would be that of “crypto-assets” – or crypto-assets . This pitfall is quite common in innovative fields. However, the lack of terminology and clear definitions makes it difficult to speak with nuances and carry out relevant analyzes. To understand and explain all the nuances of this ecosystem, we must therefore analyze it, then classify it.

The same properties and use cases are found in many assets of the crypto ecosystem. These similarities were used to establish a classification of digital assets. However, no typology has yet been adopted and used by all players in the crypto ecosystem . Financial regulators, institutional actors, traders and researchers each have a different perspective on the issue.

The classification of digital assets only caught the authors‘ attention after the wave of ICOs of 2017. Since then, several works of classification of digital assets have been undertaken and, in my opinion, the most successful is the classification system. token (Token Framework Classification) of Thomas Euler .

A model adapted to a protean active class

This multidimensional model forms a decision tree for mapping digital assets according to their characteristics. The first step in this classification was to establish five dimensions for tokens: purpose, utility, legal status, underlying value and technical layer .

Then, in each of these dimensions, a given asset can correspond to one of the 3 sub-dimensions. However, some assets, due to their unique characteristics, may correspond to several sub-dimensions. This is the beauty of cryptophère: assets with unique characteristics offering innovative use cases . Note that some assets may also not have one of the dimensions of the model!