Professional Investors Flock to Crypto

In the race for who can buy the most cryptocurrency, professional investors have taken the lead, The Wall Street Journal reported Sunday.

Institutional clients traded $1.14 trillion in crypto on the Coinbase exchange in 2021. That was up from $120 billion the previous year — and over twice the $535 billion for retail clients.

Retail traders made up a lot of the bitcoin market in the early years, trading on exchanges offering a single bet, to either buy or sell bitcoin. Because of that, the market was “small and erratic,” WSJ wrote, and could be easily moved by just modest trades.

Leah Wald, CEO of Valkyrie Funds, which sells crypto-focused exchange traded funds, said it’s a “completely different game” now. While there are still retail investors, bigger players like hedge funds, registered investment advisers and companies have joined the playing field. WSJ wrote that there were billions invested by venture funds in crypto in 2021.

And there are other entities, like the country of El Salvador, which has adopted bitcoin as its national currency.

With the growth, there’s been a new mainstream status for crypto. And crypto exchanges have responded by beefing up on their marketing, in a bid to become more widely known.

WSJ wrote that a survey of 300 institutional investors conducted by State Street in October found that over 80% of them were allowed to be exposed to cryptocurrency.

The fund found that the only major institutional group not in the market was sovereign-wealth funds, though the State Street study found that they’d likely be in, too, within two years.

Read more: As Crypto’s Popularity Grows, Gateway Providers Help Merchants Accept it. Here’s a Closer Look

PYMNTS wrote that with crypto becoming more mainstream, there has been a move by customers to pay with blockchain-based currencies.

Last year a PYMNTS study found that 16% of Americans had already bought or received crypto, with 29% also planning to get into the market.

That number includes 18% or around 46 million who want to use it to pay for everything from groceries to travel.



About: Forty-two percent of U.S. consumers are more likely to open accounts with FIs that make it easy to auto-share their banking details during sign-up. The PYMNTS study Account Opening And Loan Servicing In The Digital Environment, surveyed 2,300 consumers to examine how FIs can leverage open banking to engage customers and create a better account opening experience.

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