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What Must Happen in The Crypto Space To Attract More Institutional Investors

The cryptocurrency sector has exploded over the past two years, leading to widespread growth and interest in the space. Part of this is also the increasing shift towards institutional investors that have carved out a niche moving forward.

Cryptocurrency is a new and exciting market that has captured the attention of investors from all walks of life.

Investors are taking note of the market’s massive potential, which is driven by its large growth rate and non-correlating performance with traditional asset classes. The cryptocurrency market is undeniably on a bull run, but many investors feel that it’s still in the earliest stages of development.

For crypto to go truly mainstream, there needs to be better infrastructure for accepting payments and other recurring transactions. Transactions need to be processed faster as well in order to compete with the convenience of credit card transactions.

Cryptocurrency exchanges need to be more reliable, with better customer service and know your customer (KYC) and anti-money laundering (AML) procedures in place to provide a much safer trading environment.

Institutions must also play an important role in the development of crypto infrastructure if they are going to be involved with cryptocurrencies in a meaningful way.

To get the full range of benefits that cryptocurrency can offer, institutions need to take action now and help build up this important market.


Cryptocurrency Exchanges Are Not Ready for Users

The first stop on the road to mass adoption is the crypto exchange, which handles all the buying and selling of virtual currencies.

Unfortunately, crypto exchanges are not yet in a position to handle the needs of institutions or any type of investor who is looking for a safe and reliable trading platform that offers a wide range of services as well as payment solutions.

Exchanges need to develop better infrastructure and provide more user-friendly platforms if they want to compete with the world’s largest financial institutions.

Cryptocurrency exchanges must have a solid track record of performance and be a leader in customer service, along with sophisticated technology that handles millions of transactions per day while providing great protection for investors.

Investors will not consider trading cryptocurrencies unless they can be confident that their assets are safe on an exchange.

This requires exchanges to focus on security, including Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, that financial institutions have been using for years.

They also need robust customer service teams to handle any problems that happen after the sale is complete.

Unfortunately, cryptocurrency exchanges are not ready for institutional investors, and it is unlikely that they will ever reach a point where they can handle the needs of high-volume traders.

Exchanges are still too loosely regulated in most countries, which means that the safety measures put into place may not be up to industry standards.

While some exchanges have improved greatly over the last year based on user feedback, many need to make a lot of changes if they want to be considered reliable and safe trading platforms.

Centralized Exchanges

There is no doubt that centralized exchanges are the most popular option for investors looking to purchase cryptocurrencies today.

The top 10 exchanges by volume account for more than 90% of all cryptocurrency transactions, but these sites have several drawbacks for institutional investors.

The biggest problem with centralized exchanges is that they are vulnerable to hacking and theft, which has occurred in the past, most notably on several occasions at Mt. Gox, one of the largest Bitcoin exchanges ever.

Centralized exchanges were designed for small-volume traders looking to find brief opportunities where they can buy and sell cryptocurrency at the best available price. They are not designed to meet the needs of institutional investors, who need a high level of service that is often only provided by their internal IT departments.

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