Cardano founder Charles Hoskinson says the current crypto ecosystem is not ready for institutional money to enter the space, and he thinks it will take another 12–24 months before it is, according to a report from Cryptonews.com, published on May 7.
Per the report, Hoskinson said:
“The really smart money is aware that the market is not yet stable and that it is just not at the level of maturity [yet] to support the institutional surge.”
Institutional Money will Bring Billions of Dollars to Crypto
Providing an example of the type of institutional money Hoskinson expects to enter the market in 1 to 2 years, he mentioned BlackRock, an American global investment management corporation with nearly $6 trillion in assets under management.
Hoskinson says if a firm of this size were to allocate just 0.5% of their portfolio in cryptocurrencies, it would bring billions of dollars into the crypto market. If this money were to enter now, it would have a significant effect, seeing as the crypto market cap at the time of writing is just over $185 billion.
Hoskinson holds that the crypto market needs to mature before it can stably handle such an influx of money.
What Does the Crypto Market Need for Institutional Money?
If billions of dollars from institutional money is to flow into the crypto market, a number of things must be established first.
First of all, it’s imperative that we set up clear and established regulations for cryptocurrencies and the markets. There is still too much uncertainty regarding crypto regulations, as there is no set framework on how to regulate this market.
While this may not be a problem for the average retail crypto investor, it is for institutions, as they only deal with established and regulated markets.
Another thing institutional money needs is crypto custodial solutions. These solutions are already being figured out, as Coinbase launched a custody service in July 2018 and Fidelity Digital assets launched their crypto custody solution this past March.
Do you think institutional money will only arrive in the crypto markets in 12–24 months from now? Let us know what you think in the comment section below.