Institutional Adoption Soars

As the sun sets on 2020, Galaxy Digital has illuminated the digital asset landscape with record-breaking volumes. Their over-the-counter trading desk reported a staggering 75% year-on-year increase in trading volumes during the third quarter, reaching a whopping $1.4 billion. It appears institutional investors are no longer just dipping their toes in digital currency; they’re diving in headfirst!

What Sparked This Surge?

Galaxy credited several factors for this growth. The expansion of their counterparty base, the introduction of an electronic trading platform, and a growing interest in crypto derivatives all played significant roles. This trifecta has effectively turned Galaxy Digital into the trendy hot spot for institutional crypto trading.

Assets Under Management

The company reported assets under management (AUM) totaling $407.4 million at the close of Q3. This includes:

• $82.4 million in passive Bitcoin and index funds
• $325 million in the Galaxy EOS VC Fund, a collaboration with Block.one

Notably, Galaxy’s Bitcoin funds saw a 17.3% increase during this quarter, while the large-cap Crypto Index Fund returned a jaw-dropping 32.3%.

Institutional Investors Weigh In

Galaxy Digital’s founder and CEO, Mike Novogratz, noted a significant surge this year in institutional interest. Investors are scouting for hedges against market volatility, especially given the low-rate environment. “I expect the adoption of digital assets, such as Bitcoin and Ethereum, to continue growing,” he stated, as more traditional investors search for diversification and refuge in this digital age.

The Future Looks Bright

Tim Plakas, the head of sales at Galaxy Digital Trading, added further optimism by pointing out the Q3 acquisition of BlueFire, a proprietary trading firm focusing on digital asset liquidity, which he sees as a game-changer for their competitive edge.

A Paradigm Shift in Investment Trends

Unlike the 2017 bull market, which was primarily driven by retail investors’ fear of missing out, the current euphoria surrounding Bitcoin stems largely from institutional uptake. For instance, Grayscale’s Bitcoin Trust has been enjoying a surge of inflows, projected to reach 500,000 BTC by the end of 2020 — that’s about 2.7% of Bitcoin’s entire circulating supply!

Big Names Jumping On Board

Legendary investors like Paul Tudor Jones and Stanley Druckenmiller have also thrown their hats in the ring, praising Bitcoin’s growth potential in today’s economic climate. As Bitcoin’s price recently peaked at nearly $16,500, it’s clear that institutional interest is not a passing phase, but rather the dawn of a new era in cryptocurrency.