Galaxy Digital CEO Mike Novogratz has described the broader cryptocurrency market as “slack” or lack of enthusiasm largely due to institutional investors shying away from cryptocurrencies.
In an interview with CNBC on June 1, Novogratz said that while relatively small retail buyers add some stability to the market with their modest holdings, the lack of large buyers is becoming an issue. "Retail keeps bidding. We're seeing it on all platforms, it's just that there isn't a lot of institutional excitement right now." These claims echo a May 31 report from CoinShares director of research James Butterfill, which detailed outflows from institutional purchases of digital assets totaling $39 million as of last week, the sixth straight week of outflows.
However, Novogratz points to two major developments in Asia that could help reverse that trend. First, he points out that Chinese social media app WeChat now offers Bitcoin. The offer on its app, which he sees as a major milestone given its popularity .At the time of writing, WeChat has 1.3 billion monthly active users, according to Statista. Second, Novogratz has set his sights on Hong Kong, which has officially begun allowing retail customers to trade cryptocurrencies on regulated exchanges for the first time, a sign of growing adoption in asia.
In an interview with Cointelegraph, Tommy Honan, head of product strategy at Australian cryptocurrency exchange Swyftx, agreed that the cryptocurrency market has "failed" very much over the past month.
“The level of activity among institutional investors is definitely more subdued. But it’s not just institutions, retail investors’ pockets are also being hit by cost of living pressures,” he said. As cryptocurrency firms scramble to navigate an increasing ly volatile regulatory environment in the US, Honan still expects a strong recovery in prices when big players decide to jump back in. "Institutions are going to come back into the market, and when they do, they're going to come back strong. I just don't want that to happen in the US unless one of two things happens," he said.
"You either need established and sensible rules for crypto. Or you need the Republican Party to win next year's US election. Crypto has become a wildly partisan issue almost overnight, which is exactly what the industry doesn't want or need." Like Novogratz , Honan said Hong Kong presents a unique opportunity for the cryptocurrency market, unleashing a new wave of investors to enter the market and giving US companies a place to set up shop if needed.
