Institutional Adoption Driving Crypto Market
The crypto markets have kicked off 2021 at a brisk pace, with many of the leading cryptocurrencies hitting new all-time highs each week, driven by a string of positive developments in the industry. Institutional investors continue to express strong interest in Bitcoin, while public companies such as Tesla have gone as far as taking significant positions in Bitcoin. On the commercial front, Mastercard's announcement that it will integrate certain cryptocurrencies onto its payment network and BNY Mellon's decision to offer certain crypto services underscore rising investor and user demand for crypto. The macro environment is also providing a tailwind to Bitcoin as investors hunt for yield amid the shadow of potential inflation, driven by higher commodity prices and pending stimulus. These developments have helped push crypto prices higher, but the real catalyst, in our view, has been institutional buying. In this report, we break down some of the key signs of institutional activity we are following for BTC and ETH, provide an overview of institutional developments in the crypto space, and discuss what we expect for the remainder of Q1.