At some point in the near future, mutual funds, retirement plans, pension funds, and HNWI capital will flood into the crypto market.
A small amount of this started in the fall of 2017 when crypto prices skyrocketed, but the hype was mostly driven by individuals and not large investment funds. The big institutional investors still haven’t made the jump, but the chance of big gains and the hype around cryptocurrency will eventually win out and the big funds will start investing in cryptocurrencies.
It will only be a small percentage of their total capital, but even that could easily be a trillion dollars or more that will flood into the total crypto market cap.
That money will not flow into individual currencies, but instead into the market as a whole. Like a crypto Noah’s arc, with each of the top 10, 20, 50, or 100 currencies rising in correlation as investors apply stock market investing logic to cryptocurrencies. The fund managers won’t want to risk betting on individual projects, so they will bet on the top coins and “gain exposure” to the whole market.
The rising tide caused by this blind investment will cause the prices of good and bad projects to rise, regardless of utility. Some of the coins will have real uses and staying power, others won’t, but you won’t see that play out for a longer period.
You will see a handful of individual project burn and crash, but the market won’t sort out the shitty coins for a long time.
Before and during the coming flood, the price won’t be a good gauge of the quality of a project. It will only be in the long-term, once the big institutions have entered and we’ve been through another large boom and bust cycle. Only once all the players are in the market will you start to see the price of cryptocurrencies diverge based on the actual utility of the project.
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