The crypto markets are known to be very volatile. This makes investing in crypto very risky, when you compare it to alternative investment markets, such as the stock market or the real estate market.
Your $1000 investment could suddenly be worth only $100 the next day. On the other hand, this also offers great investment opportunities. These rapid downward movements also occur upward. For example, your $1,000 investment could suddenly be worth $10,000 the next morning. When you know how to deal with this volatility, the crypto market can be extremely lucrative. More and more investment banks are also seeing this.
Investment banks on the crypto market
Flow Traders in particular are already very active in the crypto market. They have been engaged in crypto trading since 2017 and are, in their own words, the market leader in this within Europe. Other trading houses have so far been a lot less intensively involved in crypto trading, but they also seem to be making the shift more and more. Trading house IMC, for example, currently has as much as $73 million worth of crypto coins on its balance sheet, according to a recent annual report.
IMC says it sees ‘a lot of potential’ in crypto, adding that it sees it as a rapid growth opportunity. Also the CEO of Flow Traders sees a lot of potential in crypto, he expects a lot of growth in the coming years.
Besides these European trading houses, Wall Street is also showing increasing interest in the crypto market. Companies like Jump Trading, Jane Street and Tower Research are already trading crypto. Jump Trading, for example, does not only trade in the large cryptocurrencies such as Bitcoin or Ethereum, but is also fully engaged in DeFi (decentralized finance).