We continue to see many institutions investing in crypto. Bitcoin has become the new “safe haven” for many of these companies. MicroStrategy has invested more than $400 million in bitcoin. Square has purchased $50 million worth of the asset, and now Stone Ridge Asset Management has announced an investment in bitcoin worth approximately $115 million at the time of writing.
Stone Ridge Gets Its Hands on BTC
Many analysts have claimed that without institutional investors, bitcoin and crypto are not going to reach mainstream or legitimate statuses. Well, it’s probably safe to say that the presence is here, and that bitcoin is likely thriving because of all their work. The world’s number one cryptocurrency by market cap has reached a new pinnacle this week, spreading its wings and jumping to $11,500 in the past 48 hours, though at press time, the price has calmed down a bit and shrunk down to $11,380.
Still, one cannot deny that bitcoin is doing better than it has in a while. September – which is typically a bearish month for the cryptocurrency – brought the asset down to about $10,100. It eventually ended the month at around $10,700, meaning it managed to get back on its feet somewhat, though this number was far less than the $12,400 we had witnessed at the end of August.
There was good news in that bitcoin never fell below the five-figure line, but it’s safe to say that some investors were still disappointed in the performance of their favorite digital asset. Now, the currency is rising steadily again, giving hope that the fourth quarter of this year will bring some solid results for crypto investors across the world.
Stone Ridge founder Robert Gutmann commented that the reason bitcoin suddenly looks so attractive is because many individuals and companies alike are rethinking their portfolios during this time of financial crisis. The coronavirus pandemic continues to spread, and many are looking at banking and traditional finance in ways no one ever thought possible.
He states:
We’ve seen a pretty dramatic acceleration in the count of institutional investors who want to participate in the market since March of this year. The macro backdrop against the public health backdrop has caused a lot of people to rethink their portfolio composition… We’re having lots of conversations with banks about various kinds of partnerships all the way from basic sub-custody solutions up to end consumer products that the banks are providing where we’re the back end.
Retailers Are Still Bigger
Gutmann recently co-authored a report about bitcoin that suggests that for the most part, however, retailers are still the primary customers in the digital currency world. The report explains:
Given that agents (fund managers, trustees and other fiduciaries) control the vast majority of the trillions of dollars in investable assets in the world, we expect material institutional purchases of bitcoin as these agents work their way through the challenges of this burgeoning asset class.