Bitcoin and other crypto prices have been going through a turbulent drop with only moderate recovery since the most recent all-time high in November of 2021. The current unimpressive price action could be a passing trend, though, as some speculate that crypto market could be in for the largest wave of institutional investors yet.

Shark Tank’s Kevin O’Leary Weighs in on Crypto Market Prospects

Crypto Market Cap vs Stock Market Cap

Kevin O’Leary is among the most well-known names in investing around the world. The Canadian business mogul and investor is recognized for his long-standing appearance on the Canadian program Dragon’s Den and subsequent tenure on the American Shark Tank. Both programs feature O’Leary and a cast of other successful business figures like Mark Cuban receiving pitches from entrepreneurs with the option to invest in their companies.

O’Leary is now focused on potential investments of another kind, having recently put out his views on the latest crypto regulation proposals and their potential impact on institutional investors. Crypto has long been driven by smaller investors, and while institutional investment has grown significantly over the past two years, it’s still a far cry from their adoption of conventional opportunities.

Many larger investors are put off by the lack of concrete regulations around cryptocurrencies. Without an established framework, there is always a certain level of uncertainty over what future regulatory changes will do. The most notable example to date is the complete ban of cryptocurrency transactions in China in September 2021. Prior to this ban, China hosted the largest crypto mining industry in the world, all of which was shuttered or forced to relocate following the ban.

O’Leary’s assessment of the current landscape highlighted the need for a concrete regulatory framework before institutional investors can truly commit. Speaking specifically about US regulations, which are expected to provide a model that many other nations may adopt, O’Leary emphasized that any regulatory framework would be better than none at all, even one that isn’t perfect. This is particularly significant when examining the repercussions of various get-rich-quick schemes like Immediate Edge. A quick google search for Immediate Edge review reveals why.

Institutional Investment Represents an Untapped Potential

Crypto Market Cap vs Stock Market Cap

2021 saw a massive rise in institutional investment in cryptocurrencies and blockchain technology. Billions have entered the crypto market in the form of direct purchases of cryptocurrencies and investment in crypto-focused startups and holding companies. However, according to O’Leary, all of this progress is nothing compared to what true institutional adoption could provide.

Based on his assessment, cryptocurrencies could be seeing trillions in investment rather than billions. All of that potential is held up by a metaphorical dam of uncertainty. Once that dam breaks, the influx of institutional investors into the market could mark a dramatic shift in every aspect of the crypto landscape.

O’Leary specifically cited examples of sovereign wealth, pension funds, and other massive investment pools that have to date not entered the market. Private investors and hedge funds have been the primary impetus for crypto market growth so far, and their relative size pales in comparison to the larger market potential.

Cryptocurrency Still Early in Market Cap Compared to Other Asset Classes

How to Calculate Cryptocurrency Value

Bitcoin and other cryptocurrencies have grown far beyond what anyone could have imagined ten or even five years ago. While crypto has increased in orders of magnitude time after time, it started from nothing and still hasn’t caught up to other asset classes.

The total crypto market cap sits at just shy of $2 trillion today. This number sounds incredibly large, but it is down from an all-time high of $3 trillion in November 2021 and can’t compete with the types of assets that institutional investors back today.

Gold is one asset that is commonly compared to crypto, drawing parallels with its use as a store of value. Many nations around the world maintain significant gold reserves, along with those held by private organizations. Gold alone has a market cap of nearly $13 trillion, dwarfing all of crypto despite being a single asset.

Crypto is even further eclipsed by the assets that make up most large portfolios. Equities are currently at over $90 trillion, with debt securities having a market cap of $130 trillion. Even these are limited compared to the largest asset class, real estate, which sits at $280 trillion.

From any perspective, it’s clear that institutional investors are dealing with amounts that far exceed the current investment in crypto. With a stronger regulatory framework in place, we could see these investors finally enter the market and drive a new era of unprecedented growth.

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