“The cryptocurrency market is too small for institutional investors”

Fundstrat Global Advisor managing partner and cryptocurrency enthusiast Tom Lee explained why institutional investors are in no hurry to invest in bitcoin and other digital currencies.

In the next issue of the Scoop podcast, Lee noted that there are both mechanical reasons preventing institutional investors from entering the cryptocurrency market, as well as infrastructural ones. Moreover, one of the main reasons is the size of the market. Lee said:

“Gold capitalization reaches $ 9 trillion, and the stock market – $ 66 trillion. The bond market exceeds $ 86 trillion. At the same time, bitcoin capitalization is less than 0.5% of the total volume of traditional markets. If you ask someone to convert 1% to bitcoin, this will already increase the market threefold. It’s like asking someone to place a big bet in a casino. I think that about 1% of Americans own bitcoin, but this is not enough for institutional clients, rather it seems like a hobby. “

Lee also noted the lack of necessary infrastructure and the lack of regulatory protection for investors. In the United States, they can ban Bitcoin at any time, and institutional investors are not prepared for such risks. In addition, according to Lee, due to regulatory uncertainty, institutional investors face “reputational risks” when entering the cryptocurrency market.

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