Risks from large financial institutions entering the crypto market

[MrSpasybo 1049]

Perhaps you will be surprised by the title of this topic, as we have always assumed that the participation of large institutions in the crypto market will have positive effects because:
+ Crypto is advertised and became popular with the community;
+ Value of crypto accepted;
+ The increase in buying pressure causes token prices to be pushed up.

 

However, everything is not just pink. I realize that besides such advantages, the participation of financial institutions creates a number of risks as follows:
+Financial institutions are likely to use crypto in the art of accounting like Tesla did with BTC. Crypto will become a tool to manipulate financial reporting metrics rather than an investment;
+Financial institutions have bought a lot of crypto and they will sell a lot of crypto: this happens when financial institutions want to take profits or offset losses. This sell-off will create a huge drop as ICO projects sold out huge amounts of BTC & ETH in 2018 after successful funding. Financial institutions are not the place to burn tokens ^^

 

What do you think about this? Will the participation of financial institutions have a positive or negative impact on the crypto market in long term?

[ARSALS 419]

yes my friend you are right a many things have been joined this crypto form and their working here with knowledge gathered they are working here and there are also successful persons in Crypto.

[kyoukage01 3181]

5 hours ago, MrSpasybo said:

What do you think about this? Will the participation of financial institutions have a positive or negative impact on the crypto market in long term?

I believe the participation of financial institutions is an eventuality we small-time crypto users will have to face sooner or later. The adoption of cryptocurrencies now and in the future include such institutions adapting to include crypto and its technology into their portfolios.

 

The negative is that they may become the new whales and market manipulators in the future. Should they ever decide to create their own exchanges as well, there is also the danger of suddenly implementing restrictive measures on their own platforms at a later date such as KYC etc. due to them being more prone to government regulations.

 

On the positive side of things, there is the obvious things that you've mentioned.

5 hours ago, MrSpasybo said:

+ Crypto is advertised and became popular with the community;
+ Value of crypto accepted;
+ The increase in buying pressure causes token prices to be pushed up.

I'll add that the cryptocurrency-based technologies like blockchains will likely be developed and expanded more to fit the needs of these institutions. Any advances in blockchain technology will be useful to us crypto users in the long run.

 

To minimize the risk of these institutions doing whatever they please in the crypto market, I think more institutions should join in it. Not just financial institutions. That way, there is more competition involved, and one institution becomes more wary of its drastic moves lest the others react accordingly.

 

Edited May 13, 2021 by kyoukage01

[Whited35 15285]

6 hours ago, MrSpasybo said:

What do you think about this? Will the participation of financial institutions have a positive or negative impact on the crypto market in long term?

In case of funding a large amounts in crypto by bigger financial institutions, I see uncountable disadvantages than the advantages in the case of the global adoption and the practical usage of the cryptocurrencies in the daily lives of majority of users. 

When price of Bitcoin(In which bigger financial institutions have put a huge amounts as a hedge of inflation) raise, ordinary people also invest in them thinking like price ill grow up but once the suitable time comes, such institutions start to take the profits by leaving so many small retailer investors in the deep trouble. 

 

[Diala 24]

My friend, I think that there are fears that companies and major financial institutions will enter the world of cryptocurrencies, as it will lead to the strengthening of a number of cryptocurrencies very quickly and at the same time lead to a decrease in the value of other currencies.  For example, Tesla has announced that it will not invest in Bitcoin for the sake of the environment, this matter led to a decrease in the value of Bitcoin on the same day, and attention is now turning to Tesla waiting for any cryptocurrency you will invest in and this will inevitably lead to an increase in the value of the cryptocurrency that you will choose  Therefore, companies and financial institutions can influence the cryptocurrency market and it will affect small investors.