- Giorgi Khazaradze says retail investors alone cannot drive the market
- A ‘safety net’ could see more institutional investments into crypto
Institutional adoption of crypto has increased steadily over the past several months, amid investor interest following stellar performances for Bitcoin, Ethereum, and other digital assets.
But while institutional inflows have been on the rise, many more companies are choosing not to diversify into crypto due to regulatory hurdles.
In an interview on Wednesday, Aurox CEO Giorgi Khazaradze reiterated that it’s a lack of regulatory protection for investors that are keeping many institutions off the crypto sector.
Retail investors have increased their exposure, especially with the explosion in decentralised finance and non-fungible tokens. The SEC’s recent approval of Bitcoin futures ETFs provided a significant boost to institutional investors.
But Khazaradze, who was speaking in Brooklyn during the ‘Crypto Goes Mainstream’ event, noted that regulation is the key to unlocking more capital from big-money investors.
“Retail investors can’t drive this market by themselves,” he told participants at the event.
If the US and other major regulators put in place measures to encourage investors, then institutions can find it quite easy to add crypto to their portfolios.
This week, Apple CEO Tim Cook revealed that he holds cryptocurrency. He however noted that the company had no plans to directly hold Bitcoin or other cryptocurrencies at the moment. Regulatory concerns could be one of the reasons.
“It is really about the regulation. I mean, taking a risk and investing in tokens on decentralized exchanges—there is no safety net, and an institution is not going to take that risk,” he noted.
Firms like PayPal, Visa, Tesla Inc., are among those whose crypto overtures have lent a major boost to the crypto market, and Khazaradze explains why greater institutional investment is good for cryptocurrency:
“Institutions can speed up the adoption and everything, but they need to have some kind of safety before they want to get involved.”