Institutional investors will play an important role in securing the future of cryptocurrencies such as Bitcoin (BTC), according to Eric Voorhees, CEO and founder of ShapeShift.
In a panel discussion at LaBitConf this year, Voorhees said that the bitcoin adoption curve will grow exponentially over the next five to ten years. At the time, Voorhees estimated that half of the world could access BTC. He believes that mass adoption will happen at a later date, but when Bitcoin becomes the global standard for the currency.
The committee was almost unanimous in its opinion that Bitcoin is better served by multi-convicted organizations that buy and carry BTC. Thus, institutional implementation is a net positive for the ecosystem because it ensures that the rules of the game never change and that governments try to intervene.
Voorhees said that governments have more incentive to censor bitcoin if it is primarily used by retail investors. When large enterprises are at stake, they can be a natural bulwark against government takeovers.
Regarding Bitcoin, Voorhees indicated his belief that “the larger the formation and the diversity of its owners, the better” before proceeding: “Democratizing control of money is the essence of Bitcoin.”
While Voorhees says we are still in the very early stages of institutional adoption, 2020 has been a watershed year for digital assets in terms of traditional adoption. Big investors like Paul Tudor Jones and Stanley Druckenmiller have confirmed their bitcoin stake, while PayPal and Cash App BTC have recently purchased the recoveries.
Meanwhile, Grayscale’s digital asset manager continues to pool Bitcoin and Ether (ETH) among standard fund investments.
Bitcoin is facing an equity shortfall that has been nearly blocked by its recent deflationary halving. With supplies set at around 900 Bitcoin per day, institutional adoption appears to have a positive effect on price discovery.
Voorhees believes that the real growth in institutional interest will occur near the next bull market peak, when a lack of bitcoins damages reputation.
Voorhees said that higher rates are not a problem for large institutions, as many are waiting for Bitcoin to get liquid.