The co-founder and chief investment officer of cryptocurrency asset investment firm BlockTower Capital, Ari Paul, has argued institutions aren’t buying bitcoin in a bid to gain large amounts of wealth, and are instead buying BTC to protect their wealth.
In a SALT Talks interview with John Darsie, first spotted by Daily Hodl, Paul argued that investors are taking a defensive approach when they invested in the nascent cryptocurrency space in a bid to stay wealthy. He said: “We’ve been talking with a lot of billionaires in the financial world. It’s such an interesting shift in mindset. They are now thinking defensively. They are thinking enough of their billionaire buddies have 10% of their net worth in Bitcoin.”
Per Paul’s words, they are thinking that if they do not invest in BTC and the cryptocurrency keeps surging they won’t be “in that rich club,” or won’t get “invited to parties,” depending on where they are in the hierarchy.
This, he said, sees them think they need to passively allocate funds to the cryptocurrency space “just to keep up.” He added it’s “not about getting rich, it’s now about staying rich.” The CIO of BlockTower added data shows high net worth investors are entering the market.
He cited data showing bitcoin moving off of cryptocurrency exchanges, which points to “massive institutional buying.” It’s believed large movements out of exchanges are a result of over-the-counter trades from institutional investors. As FortuneZ reported, as the price of BTC surged past $30,000, $1.7 billion worth of outflows from Coinbase suggested institutions kept on buying. The price went on to reach a new high near $42,000.
Paul added that institutional investors will help reduced bitcoin’s well-known volatility. As these investors are “looking to buy more on dops,” and “are not going to sell with a change in trend.” While he conceded bitcoin’s volatility won’t disappear, it will gradually fall.