Story by Bybit

Institutions have historically avoided investing in cryptocurrency because of its volatility and lack of regulation. However, as crypto continues proving itself to be a viable asset, more institutions are open to trading it. Since there is a wide variety of cryptocurrencies and regulations for crypto is ever changing, the best move for an institution may be to go through a company that can keep track of all of these changing rules. 

Institutions that trade and are not considered individuals include banks, funds, asset managers, brokers, and more. Any of these institutions could choose to trade crypto for the same reasons an individual would: potentially high returns with less overall portfolio risks. However, there are several reasons an institution would choose not to trade crypto that are usually slightly different from an individual’s. Crypto’s lack of regulation is a drawback for many people and institutions. Bitcoin has recently made significant progress on that front with the approval of Bitcoin ETFs, or exchange-traded funds. Major investment firms Fidelity and BlackRock taking on Bitcoin ETFs gave cryptocurrency a new level of legitimacy, especially at the institutional level. The other major drawback for institutions looking to invest in cryptocurrency is liquidity. The lack of high liquidity can be an obstacle for institutions because of the volatility in the crypto market that makes cryptocurrencies a somewhat unstable investment.

As regulations improve and create better trust between institutions and cryptocurrencies, institutional crypto trading is on the rise. If more institutions invest in crypto, the liquidity issue should be somewhat resolved as well. A higher volume of cryptocurrency will increase liquidity as well. With this increase in interest in institutional crypto trading, many institutions will be looking for the right platform to trade with. While there are many choices for crypto trading platforms, institutions will be looking for the most trustworthy brand with a proven track record of regulatory compliance and investment success. Commonly used platforms like Binance or Robinhood have experienced scandals and negative press over the past few years, making them unattractive to institutions.

Institutions should look to reputable brands like Bybit when searching for a trading platform. Bybit is specifically geared toward institutions, automatically making it a better option than more widespread names like Coinbase. Bybit offers bespoke trading solutions to ensure the institution’s success. With deep liquidity, asset safety protocols, and a cost-efficient fee structure, Bybit is a smart choice for any institution. Bybit also offers several trade execution solutions like a broker program, block trading, OTC trading, and more. With partners like Selini, DWF Labs, and Fireblocks, Bybit has plenty of proven expertise in institutional crypto trading.

Safety is the most important part of choosing a crypto trading platform. Building trust between the crypto market and institutions is the key to raising crypto’s profile as a viable asset. Bybit understands this and offers proof of reserves and comprehensive security policies to ensure capital safety. When looking for a crypto trading platform, make sure that you research the safety policies of each platform you consider using. Regulations vary greatly from country to country and currency to currency, so looking at where the platform is based and what security measures it has implemented is essential. This is especially important for an institution, which may have clients or offices based all over the world and need to follow several different sets of regulations at once.Institutional cryptocurrency trading is quickly becoming central to cryptocurrency’s fight for legitimacy. Crypto is no longer just an internet fad or a meme; people are making huge amounts of money from trading and investing in crypto, and institutions want in. As regulations change and Bitcoin and Ether become fixtures of the financial conversation, institutional crypto trading will rise. Make sure your institution is prepared when it does.

This article is for informational purposes only. Investing in digital assets carries a high level of risk and may not be suitable for all investors. Potential investors should ensure that they have an understanding of the risks involved, seeking professional advice where appropriate.