Cryptocurrencies have come a long, long way, and if you’ve been on this trip with us, you know the history.
Cryptocurrencies, like so many cutting edge developments in many fields, started out as something on the edge of society, a fringe idea that only “bleeding edge” first adopters were willing to move into.
To be fair to skeptics, quite a few bleeding edge ideas end up burning those who get involved. But the ideas that succeed are often the major game changers in society, and smart people are always looking to make the most of those changes as early as reasonably possible.
From crypto skeptic to super-supporter
To take one prominent example, many people may have the impression that President Trump was always a cryptocurrency supporter, but that’s just not the case. (You might remember he once called bitcoin “a scam against the dollar.”)
Institutional Investor offered this perspective from hedge fund manager James Koutoulas:
“Trump got into cryptocurrency back in 2022. But he really had no idea what it was at first.”
But he caught on quickly – we could debate the motives behind the change of heart. During his campaign, the former and future President told a live audience on X:
“Crypto is one of those things we have to do. Whether we like it or not, I have to do it.”
Sounds like a skeptical take to me! It’s not hard to understand why Trump was skeptical of cryptocurrencies in the past: it was in many ways a wild west situation. Prices could fluctuate wildly, without any stability, and memecoins could be launched, pumped to skyrocket and, then, the inevitable rugpull. Many lasted less than a week, if that long.
But a lot can happen in four years…
That was then… What about now?
One of the notable things about Trump’s 2024 campaign was his championing cryptocurrency’s adoption. The results were noteworthy.
And Trump has pushed forward with that campaign promise signing into law legislation like the GENIUS Act. That legislation included setting up federal regulation of stablecoins “to make America the crypto capital of the world,” according to the White House.
The effect of Trump’s crypto advocacy has been immediate. Again from Institutional Investor:
It’s launched a “renaissance of sorts,” says Giovanni Vicioso, global head of cryptocurrency products at the CME Group. “We are certainly in a new era for cryptocurrencies,” he tells Institutional Investor. “It appears the dark ages may be over.”
That’s right, the cryptocurrency world is no longer stuck in a stifling regulatory environment…
Big-money institutional investors have gone pro-crypto, too
How do we know? Well, other than the daily press releases and conference calls, there’s:
One signpost of rising institutional interest has come in the form of fatter block trades, typically driven by the more dominant institutional players.
“Fatter block trades” are a clear sign that big institutions (like hedge funds, banks and pension funds – also known as “institutional investors,” because they’re trading on behalf of hundreds or tens of thousands of clients) are getting more involved in crypto is that we’re seeing consistently larger, single transactions – block trades – happening more often.
Block trades are typically much bigger than a retail buy or sell order that you or I would make. They’re usually done off public exchange order books to avoid disrupting prices. They’re the preferred method for large players who want to move millions of dollars at a time – without tipping their hands.
The odd thing about these big trades, though, is that retail investors haven’t been paying attention. Chris Kuiper, head of research at Fidelity Digital Assets, says:
“This is the first time I have seen institutional interest, or adoption, that is very, very high while retail is very, very low.”
And what makes this situation especially odd is that institutional investors tend to be those who look for safe and stable investments. Think about a pension fund or an insurance company, for example – are they looking for the hot new thing? Or are they looking to hedge their exposure to all the old, established asset classes?
Here’s what I think: Obviously institutions aren’t taking huge risks – instead, they’re taking calculated risks with massive upside potential.
Institutions aren’t like individuals. For me and you, so-called “retail” investors, the worst that could happen is our investment goes to zero. So long as we stay away from speculating with margin loans and leverage, the worst thing that can happen is our asset goes to zero.
Institutions have much more to lose! If a white-shoe brokerage, somebody like BlackRock or Fidelity diversifies with crypto and it doesn’t work out? They’ve lost money, sure – but much more than that, their reputations would take a massive hit. Bad decisions made at that level can bring down an entire company. So while you and I have to think about our financial futures, institutions have to think about that plus their brand names, their trustworthiness.
Institutional investors have way more to lose than just money! There’s a good reason that finance is often considered the most conservative sector of the economy.
You would think that retail investors who’ve shied away from cryptocurrencies in the past might be reconsidering their decision. Moving into cryptocurrencies now, following the smart – and more conservative – institutional fund managers.
But that hasn’t happened!
Not yet.
The window of opportunity is still open
Once bleeding edge ideas prove themselves, once early adopters have blazed a trail ahead of us (and proven it’s a trail worth following), that’s when the less adventurous and more timid start to move.
That’s exactly where we are with the crypto sector right now.
Institutional funds are pouring into cryptocurrencies. They obviously see the benefit and they’re capitalizing on it.
But the average investor, everyday Americans, somehow haven’t gotten the same message.
Not yet.
And that means that we’re still in the opening stages of crypto acceptance and adoption. Everyday investors like you and I don’t have the same level of funds as the big boys. But, collectively? Well, collectively we have nearly $48 trillion saved for retirement.
Just imagine what would happen to crypto prices if just 1% of American retirement savings went into crypto today! The total crypto market cap would surge 10% – isn’t that astonishing?
I see a huge potential upside in diversifying with crypto today. Getting in ahead of the rest of the retail crowd. Do you see it, too?
If you do, then I’m certain you can understand the benefits of crypto diversification in a tax-deferred Digital IRA. I mean, why pay more taxes than you absolutely have to?
If you’re as excited about today’s opportunity as I am, you can open your Digital IRA right now – anytime, day or night – in less than 10 minutes. Or, if you want to learn more, request your free copy of the Insider’s Guide to Digital IRAs.
