Analysis that the rate of entry into the institutional sphere of the cryptocurrency market including bitcoin is accelerating as the International Anti-Money Laundering Organization (FATF) issued a recommendation for regulation of cryptocurrency in June 2019, and governments of each country revised laws accordingly. Came out.
Hanwha Asset Management and Cross Angle, the operator of digital asset (cryptocurrency) disclosure platform Jangle, jointly published a report on ‘2021, the changed bitcoin market’ on the 1st. On the afternoon of the 4th, an online seminar with the same title was held on YouTube live.
At the seminar, presentations and discussions were made by Young-jin Choi, Head of Digital Asset Strategy Division of Hanwha Asset Management, Head of Digital Asset Strategy Team, Jung-Seop Han, CEO Joon-Woo Kim of Cross Angle, and analyst Kyungpil Jang.
Cross-angle analyst Jang Kyung-pil explained that since Bitcoin was first created in 2010, it has undergone four major steps of value change.
- Birth Stage (2010~2012): A stage in which Satoshi Nakamoto and other developers tested the possibility of hacking the Bitcoin network. It is also the time when Bitcoin was first used as a currency such as’Bitcoin Pizza Day’. The price of bitcoin, starting from about $0.1 each, rose to the level of $29.
- Network Expansion Stage (2013~2015): Developers who confirmed that it was impossible to hack the bitcoin network started to participate in earnest, and the price, which rose to 1,000 dollars each, fell due to the Mount Gox hack incident and suffered a recession. However, the base of the Bitcoin network expanded during this period, with more than 100,000 retail stores that can be paid with Bitcoin.
- Popularization stage (2016-2018): The period when the participation of the general public beyond developers and’Bitcoin fanatics’ began. In particular, after the global interest in Bitcoin during the 2017 bubble period, government-level regulatory discussions began in earnest.
- Formation stage for institutional investment (2019-2020): The period when the institutional foundation was established, such as the FATF guidelines and regulatory legislation passed in each country. Based on this, institutional investors actually bought, and the price of Bitcoin exceeded 40,000 dollars each.
Cross-angle analyst Jang Kyung-pil explained that bitcoin remained in the “gorge of disconnection” for about two years after the bull market led by individual investors in 2017. This is because institutional investors were not allowed to flow in due to the regulatory void. He said, “The gorge of severance means that a high-tech or product does not get popular choices and is simply the object of the watch.
The situation was reversed when the FATF issued cryptocurrency regulation guidelines in 2019. Analyst Jang said, “between 2019 and 2020, guidelines or legislation related to cryptocurrency have come out in each country,” he said. “Beyond a small number of venture capitalists and family offices, the framework for a wider variety of institutional investors to invest in bitcoin has been laid.” said.
Junwoo Kim, CEO of Cross Angle, said that institutional investors’ bitcoin investment was made in earnest with the launch of a custodial service and a bitcoin-based trust fund, and this phenomenon played a key role in driving the bitcoin price to $40,000 last month. I explained that I did it.
CEO Kim said, “If you look at on-chain data over the past year, where the price of bitcoin has nearly quadrupled, the transaction volume of over 1 billion won, which tends to invest in large institutions, has increased by more than 20 times, and the number of wallets with assets over 1000 BTC is also rapidly increasing “He said.
CEO Kim said, “Currently, we estimate the proportion of the amount of bitcoin circulating by institutional investors to be about 16%. If the current trend continues, (the proportion of institutional investors) will increase to about 25% by the end of 2021. There is also a prospect that it can be done.
Some analysts say that Bitcoin’s maturity as an asset is increasing. Han Joong-seop, head of Hanwha Asset Management’s digital asset strategy team, said, “If you look at the data from the past, you can observe the continuous decline in the price volatility of bitcoin.” “Continuous decline in price volatility proves the maturity of the asset.” said.
One team leader said that bitcoin prices have skyrocketed after the founder of Elon Musk Tesla recently made an advocacy statement on Twitter, etc., and said, “When any asset is newly released, the price volatility is inevitable.” As seen in the stop situation, it often occurs in the traditional securities market.”
He added, “If the market capitalization of bitcoin reaches more than $1 trillion in the future, the phenomenon of price change will also be limited in a word from a certain person.”
Some pointed out that the domestic cryptocurrency-related regulatory environment should be improved. Young-jin Choi, head of Hanwha Asset Management’s Digital Asset Strategy Division, said, “In Korea, there is a lack of accounting systems for corporations to invest in virtual assets, and there are no custodial solutions or systems.” He said it needed to be supplemented.
“With the enforcement of the Special Financial Transactions Information Act revised in March of this year, the exchange will first enter the regulatory environment, but in a situation where the government in principle prohibits investment in virtual assets from financial institutions such as asset management companies since 2017, Grayscale and It is difficult for a manager that invests intensively in digital assets to come out of Korea,” he said.
Hanwha Asset Management and Cross Angle announced that they plan to publish a monthly report on digital asset market trend analysis starting with this bitcoin related report. A webinar based on this will also be held monthly.
The two companies signed a business agreement in December 2020 to foster a healthy digital asset investment culture and jointly develop transparent information services and products. Hanwha Asset Management made a series A investment worth about 4 billion won in Cross Angle in July 2020.
(Hanhwa Asset Management x Xangle) Digital Asset Report-Bitcoin market changed in 2021 by Coindeskkorea Contact on Scribd
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