Brian Armstrong talked about institutional investors in the cryptocurrency space on Twitter earlier this week, saying the question of whether or not institutions will adopt cryptocurrencies has been answered. Coinbase is reportedly seeing hundreds of millions of dollars per week pouring in from legacy financial institutions.
Custody Woes
The main issue cited by institutions looking to get into Bitcoin and cryptocurrencies is of custodianship. Getting a hardware wallet is a good idea for the average user with a few hundred dollars invested, but when it comes to massive financial institutions, they’re looking to invest anywhere from hundreds of thousands to hundreds of millions of dollars. With those kinds of numbers, extreme care needs to be exercised in the storage of coins.
Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers.
— Brian Armstrong (@brian_armstrong) August 16, 2019
Most financial institutions simply don’t have the infrastructure for a robust security system, equipped with the tools needed to properly safeguard any coins they are responsible for.
This issue paved the way for companies like Xapo and Coinbase, to offer custodianship to those firms looking for a safe way to invest big amounts in Bitcoin or other crypto-currencies.
Finance firms hopping on the Bitcoin Bandwagon
Coinbase Custody is currently the largest custodian of cryptocurrencies. Officially launching their services in July of last year, they slowly built their customer base up, reaching $1 billion in assets controlled in April of this year. With Bitcoin’s bull run seen earlier this summer, it prompted many fence-sitters to finally jump into the market and invest. Within just five months of reaching $1 billion, Coinbase now controls over $7 billion in assets, and that trend seems to be continuing.
The biggest issue with crypto adoption at the moment is the lack of infrastructure surrounding these payment networks. Companies like Coinbase that are building out the framework that will allow the legacy financial institutions to easily use cryptocurrencies will foster the next wave of adoption, allowing more and more people all over the world to take back control of their finances and enjoy more economic freedom.
How long until Bitcoin price breaks $20k again? Are institutional investors the answer? Let us know your thoughts in the comments down below!
Images courtesy of Bitcoinist Media Library, Twitter: @brian_armstrong
The post Coinbase: Institutional Folks Buying $200-400M Worth Crypto A Week appeared first on Bitcoinist.com.
Bitcoinist.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
