• For more information call 717.639.2550

  • Here is a little Q&A on my thoughts on crypto derivatives by Citigroup and how they will affect the crypto markets in the very near future.

    In your opinion how will it affect the crypto market?  

    I don’t feel as this will move the needle yet, as this is mostly a test project that Citigroup is launching with little fanfare. Only those following crypto-related news will really hear about this development, so in the short term, it won’t move the market. However, if the price of Bitcoin were to spike like it did last year, then we may see more mainstream attention.
    Will other financial institutions such as banks and crypto exchanges follow the Citigroup example and offer these receipts to their clients?  

    The demand falls on the customer and their amount of trust in the crypto market. Too much negative press is being spread in the mainstream media for institutional investors to want to dive into the crypto market. Once we see some stable growth, this absolutely is a wonderful development for mainstream adoption, as it eliminates barriers of entry.
    Will it cause Bitcoin rate increase? 
    In the future, yes, but not at this moment due to too many variables.
    Who will be the most interested among investors in these assets? 
    Even though these digital asset receipts are the easiest way to invest in crypto, you still need to find the right investor for this volatile market. That investor is a risk-taker, most likely a young millennial who is not afraid to take a little risk with their money at this stage in their life. Crypto is in a bear market and there is still no consensus on the support level, so investing in crypto is not for the risk-averse investor.
    Will these receipts attract more institutional investors to the industry? 
    Absolutely. As of now, it is difficult to invest in many cryptos, though certain apps and exchanges are making it easier to invest in the large ones like Bitcoin or Ethereum. With digital asset receipts, an investor can choose what they can to invest in and Citigroup will handle the rest. That takes the stress away from the investor on making sure they convert their money properly and so that they do not accidentally send it to the wrong wallet.
    How will the crypto community benefit from the increase of the crypto derivatives range provided by financial institutions?  
    This is just another step towards mass adoption. It will not happen overnight, as there are many variables. However, the news that large financial institutions are realizing they need to adopt this new technology to stay current should be celebrated.
    Will other cryptocurrencies beside Bitcoin have derivatives? 
    Certainly, but not right away. Bitcoin is the king, especially in the mainstream media. Bitcoin has been published and pushed hard, whether positively or negatively. To most of the world, Bitcoin is crypto and crypto is Bitcoin, meaning those terms are used interchangeably. Bitcoin derivatives need to be successful before any other one will be considered.