The co-founder and the executive of VISA, Jon Matonis, has asserted that the participation of major banks such as Goldman Sachs in the crypto ecosystem could trigger a surge in the price of Bitcoin.
“I support the entrance of major banks because it will trigger an increase in liquidity. The participating banks will develop a future market, as well as, options market. Bitcoin would start experiencing interest rate. We’ve been hearing so many things about Libor, although we don’t understand what Libor represent. Libor is actually the bitcoin interest rate index,” Matonis posted.
When Will Financial Institutions Participate?
The crypto ecosystem is highly volatile, whether it is going up or down in price. The immediate cause of the market’s volatility is because of a lack of liquidity. There has been a continued decline in the trading volume of Bitcoin and altcoins since January, so that a major correction occurred, along with the price of Bitcoin.
The continued decline in the trading volume of the market has created an opportunity for institutional and whale investors to manipulate the market in their favor, which is why the crypto ecosystem has shown corrected price movements since the beginning of 2018.
Recently, it was in the news that the Chicago Board Options Exchange (CBOE) sent a proposal to the United States Securities Exchange Commission (SEC) with a view to allowing Exchange-Traded Funds that deal in Bitcoin to trade on both the New York Stock Exchange (NYSE) and Nasdaq. The participation of banks like Goldman Sachs will trigger more retailers, as well as, institutional traders, to also participate in the crypto market.
Currently, there has been high demand from major US investors to join the crypto space, but the capital coming from the public finance industry into the crypto market is highly insignificant. However, in Japan, major investors are investing massively in buying digital currencies via cryptocurrency exchanges.
Matonis added that skeptics should not believe that Bitcoin is a bubble, but should be optimistic that it will soon take over the financial world. He further asserted that the bond and equity markets are a multi-trillion dollar market that will soon burst.
“To those that describe Bitcoin as a bubble burst, I want to correct that impression that Bitcoin is a pin that would soon pop the bubble. The real bubble is the fake equity markets and insane bond markets that are linked to the central banks. Those are the real bubble,” Matonis said.
It is still uncertain when banks will make headway in the crypto ecosystem. Although the market has been suffering image crises, some critics portray it as a gambling market. Once the bear market is over, and Bitcoin experiences a price surge, banks will be ready to address the growing interest.
Whenever there is a bear market, banks are not in a hurry to participate in such a market, except that prior to their competitors, they want to establish their presence in the crypto ecosystem. However, once they do decide to enter the market, it will be equipped with public investment vehicles and significant liquidity.
What do you think about major banks entering the crypto ecosystem? Do you agree with the assertions of Jon Matonis? Let us know your views in the comments section.