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Institutional FOMO: The Worst Kind of FOMO

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1 month ago

Bitcoin ETF is about to roll out on October 19, 2021, Tuesday. What makes the Security Exchange Commission or SEC changes mind to approve Bitcoin when many other crypto issues are pending?


What does it mean of Bitcoin ETF?

It marks a milestone for institutional investors mainly Wall Street to bet on Bitcoin. It will flood with massive money into the crypto market and potentially inflate its price.


Legendary run on 2021

Bitcoin has been performed extremely optimistic in 2021. After it hit its peak in April and sold off at 50% on China’s crypto ban. And it only took only another 6 months to close to April high. Compares on 2018 bull run which took almost 2 years to recover into the same price level.

  

Gold vs. Bitcoin

Wall Street loves to compare Bitcoin to Gold simply because it is easier for them to understand what Bitcoin is. Gold has been around 6,000 years and it worked like a charm for investors to store value even though there is no valuation of gold at all and it is difficult to store with no security to protect them whatsoever.


No one knows how much gold in the world

Gold also has been represented in ETF in many ways through financial engineering. No one actually knows how much gold exists and who controlled it. There is only an estimated amount in the world of gold. 


Bitcoin is fixed amount and transparent to the world

Opposites to gold, Bitcoin is capped on its supply and you can easily track the total amount of Bitcoin in the blockchain.


Bitcoin is not a new gold

Bitcoin is categorized by itself as technology money that grows along with technology and acts like money, commodities, or securities combined.


Institutional FOMO is bad for the market

Institutional investors are always late adopters and they have money that invests in the way to influence the market so that they have a better position. However, the Bitcoin train has run for sometimes and it is difficult for them to catch up. Their FOMO catching up may result in large market corrections and makes crypto more volatile.


Massive buying and selling may be hidden from the blockchain

Even though the transactions are publicly broadcasted in the blockchain, the ETF makes it possible to hidden buying and selling transactions within the institutional transactions without revealing transactions in the blockchain.


The market will become unpredictable and may be rigged by the institutional investors

Similar to the stock market, the buying and selling of crypto can be more unpredictable and the crypto market may change without even noticeable data published in the blockchain. It is also possible that the crypto market may eventually just be rigged like the stock market.


In conclusion

Institutional FOMO buying is both good and bad. It is good for the short-term rise but it will damage the long-term crypto market performance.


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Written by   13
1 month ago
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