Crypto Guides Featured

Bitcoin Will Create a Rift Between Institutional and Retail Investors

Anyone abreast with cryptocurrency news can easily foresee a financial storm is forming in the horizon. Institutional investment  is overshadowing any other development in the crypto world. The world is primed and an explosion of change is imminent. Besides a clash of technologies, there will be a culture crash between two very distinct classes of investors: Retail and Institutional. Competing Fintech industries in logistics, auditing, and insurance will face off and either decimate or merge with each other. And the financial world will either coexist with crypto or risk becoming obsolete. These confrontations are inevitable and unavoidable as Bitcoin encroaches ever deeper into all aspects of everyday life.

Anyone Can Own Bitcoin

The invention of Bitcoin opened the doors of investing to the average person. Investment into assets, usually reserved to financially stable individuals is now available to anyone with even spare change at hand. Armed with a basic understanding of finances and research, a person can buy and profit by purchasing into one of 2000 crypto currencies available.
The global reach of the internet created micro-markets in small exchanges where even the very poor can profit by trading in small cap coins. In the US, upcoming app Bundil offers to turn spare change into a cryptocurrency portfolio. The user can choose to invest anywhere from $.50 cents to $50,000 directly from his/her phone. It all depends on the preset settings that tell the app how much leftover change to invest after any purchase.
These small time investors capitalize on the opportunityto to buy and hold tidy but stradfast positions in crypto. In contrast, newcomers accredited investors are pushing investment firms into acknowledging crypto as a new asset class. And they want in. However, there is a huge cultural divide between the two classes of investors. And that is belief.

Cargo Cult Following

While Wall Street investors are savy, educated, and well versed in technical analysis, the retail investors are inexperienced and naive. Contrary to institutional investors who frown at Bitcoin, retail investors love Bitcoin for what it is. The leveraging of the playing field by replacing fiat controlling banks with a new Peer-to-Peer transaction system. Richard Brown, COO of R3, refers to this devotion as Cargo Cult Following. This is in reference to how remote Pacific tribes worshiped US cargo planes that delivered military airdrops in World War II. It is the belief in something not fully understood.


These two types of investors will come to grips when Bitcoin gains adoption. For the moment retail investors tolerate Wall Street because of the influx of money it brings.  But eventually institutional investors will demand that Bitcoin be altered for the sake of scalability and profits.  And then and there will come the moment when believers will draw a line in the sand and a conflict will ensue. The miners will have to choose sides or risk replacement by the use of bank issued stablecoins.  Regardless of time, this battle will come and it will create a struggle for control of Bitcoin itself.

Leave a Comment

There is something wrong with the API