Technology investment bank GP Bullhound has projected that 2019 will witness a significant influx of institutional capital into cryptocurrency. This prediction, detailed in its annual report, suggests that financial institutions are increasingly ensuring they remain abreast of the evolving blockchain landscape.
GP Bullhound’s annual report highlights a notable increase in blockchain activity, driven by traditional financial institutions aiming to capitalise on emerging opportunities. The report indicates that previous barriers, such as stringent regulations, have been removed, paving the way for increased institutional investment in both cryptocurrency and blockchain technology.
The report emphasises that this shift is not solely driven by financial motives. There is a discernible demand from corporate entities and family offices looking to build strategic positions in the cryptocurrency market. This growing interest signals a broader acceptance and integration of cryptocurrency within mainstream financial systems.
Earlier in the year, GP Bullhound had forecasted a severe correction in the cryptocurrency market, predicting that up to 90 per cent of all cryptocurrencies could potentially become obsolete within the year. The ‘Token Frenzy: The Fuel of the Blockchain’ report by GP Bullhound had already warned of a substantial market downturn, with only a few digital currencies expected to withstand the volatility.
The dramatic decline in the market, which saw many cryptocurrencies lose their value after peaking at a market cap of over $800bn, was unexpected in its intensity. The latest report also notes that Initial Coin Offerings (ICOs) have significantly reduced, now focusing on fewer but more substantial projects such as Telegram and EOS. Despite these challenges, the report confidently states, ‘we haven’t seen the last of blockchain and cryptocurrency.’
The forecasted influx of institutional money into cryptocurrency in 2019 marks a significant development for the industry. As traditional financial institutions and corporate entities move to establish their positions, the landscape of blockchain and digital currencies is poised for notable transformation.