Genesis Trading: Institutionalising Bitcoin (BTC) makes it less attractive

Fri 05 Nov 2021 ▪ 20h28 ▪ 3 min read — by Hugh Renolds

OTC market analysts Genesis Trading believe that further institutionalisation of Bitcoin (BTC) will make it less attractive to retail traders.

Demand for BTC on the decline

The spread of Bitcoin among institutional investors has negatively affected the perception of the first cryptocurrency among riskier traders. In this year’s Q3 report, the analysts pointed out that the demand for Bitcoin has “declined significantly”, as it became more difficult for traders to make a profit due to the imbalance in the market – institutional and high-frequency traders smooth out the ‘irregularities’ in the rates. Thus, the securities of the Grayscale Bitcoin trust continued to trade below the spot price; the gap between it and the futures has also become smaller.

“While this (trend) paused in Q2, it resumed over the third quarter due to the continued GBTC premium invasion and flattening of the basis curves,” the analysts write.

Notable interest in Bitcoin ETF

At the same time, representatives of the traditional financial sector have shown significant interest in Bitcoin futures ETFs. Meanwhile, crypto activists are looking for new opportunities in the DeFi space and other first-tier networks. Genesis has been approached as a liquidity provider by international investment banks as well as those holding hundreds of billions of dollars in assets.

“While the alt rotation playbook reverted back to deploying capital towards BTC and ETH towards the end of Q3, the adoption of L1s opened up more opportunities to diversify portfolios,” adds Genesis.

Institutional investors are showing increasing interest in the DeFi space. To meet this demand, Genesis has launched several new options for various cryptocurrencies like Solana and Luna, as well as the DYDX token. The total trading volume on the Genesis site amounted to $37 billion (~£27.5 billion) in this year’s Q3.

Also, recently, JPMorgan analysts said that although there are great chances of Bitcoin growing next year, buying the asset at current prices does not look very promising.

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Hugh Renolds avatar
Hugh Renolds

I believe in the bright future of crypto. I have been investing since 2017 and look to share my experience in, and thoughts on, crypto and the blockchain.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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