Institutional Demand for Crypto up by 170% – Coinbase

The crypto market may be in a correction, but interest in the market has been continually rising. According to Coinbase, one of the world’s largest exchanges, institutional interest in the market rocketed in Q1 of 2021.

The exchange revealed that its institutional crypto holdings shot up by 170% to $122 billion, up from $45 billion at the end of 2020.

Commenting on the growth, Coinbase head of Hedge Funds, Drew Johnson, stated that institutional interest in crypto had grown exponentially in the past year.

He added that the launch of crypto ETPs drove the strong interest in the market by institutional players.

Johnson also noted that a general increase in awareness of what cryptocurrencies are played a role in increased institutional uptake.

However, Johnson noted that other economy-related factors are also drawing in institutional money to crypto. One of them, he said, is the increased fear of potential inflation.

Institutional investors are looking for a way to hedge against inflation while at the same time diversifying the assets they hold in their balance sheets.

The trends that Coinbase has recorded are not unique to the exchange. Goldman Sachs recently released data showing that the demand for crypto by institutions was on the rise.

Goldman Sachs stated that FOMO primarily drove the demand. With the market rising too fast in a very short time, institutional players are afraid that they could miss out on the profits that crypto has to offer.

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