Growth Prospects Look Strong for Crypto in Final Quarter of 2021

01 Oct 2021 · 3rd Party Analysis

Colorful Polygons with an image of USD, BTC and ETH over a cnadle charts background. Growth Prospects Look Strong for Crypto in Final Quarter of 2021


In Summary

  • Despite bitcoin’s recent slump, the original coin returned a hefty 33% over the third quarter
  • Growth prospects look strong for crypto as the market moves to the final quarter of 2021. Institutional support is expected in Q4

Bitcoin Remained Robust Even After China’s Crackdown

Bitcoin and cryptocurrencies are looking strong and healthy as the market progresses into the final quarter of the year. Despite many challenges, the looming crypto industry remained robust even after China introduced its most severe ban a week ago.

The crackdown on crypto by Chinese officials did not have major and long-lasting consequences on the fast-developing industry. Less than a week ago, bitcoin, ether and other major tokens erased the losses and even turned higher.

In September, the price of bitcoin slipped about 6% to finish the month near $44,000 per coin. Nevertheless, the third quarter which ended with September, marked a rise in bitcoin’s price by about 33%. More precisely, the solid move came despite major headwinds such as another China crackdown, Iran jitters, and general bearishness.

Ether, the second-largest coin on the crypto board, finished September with a loss of about 10% to levels near $3,050 a coin. Longer-term, however, Ethereum’s native token is higher by more than 50% over the past three months.

Projections for Final Quarter Point to High Demand for Crypto

As crypto markets are entering the fourth quarter of 2021, bitcoin bulls and crypto enthusiasts remain all the more committed to seeing this space grow. That being said, institutional support throughout the year has been solid. Furthermore, as bitcoin is becoming mainstream, more professional investors are increasingly optimistic to join the rally for stellar returns unseen anywhere else.

To this end, cryptos have proved they are resilient to pressures from governments, condemnation from central banks and even outright bans from whole countries.

With that in mind, a recent article on the Institutional Investor described the outlook for crypto. In detail, it portrays a growing number of investment funds are ready to splash out billions in the crypto space. Meaning that growth prospects indeed look strong for crypto as the market moves to the final quarter of the year.

Family Offices Gearing Up to Enter Crypto

In the US, in particular, surging inflation and low-interest rates have prompted family offices to look for higher returns in bitcoin and cryptocurrencies. “With large pools of capital to invest and a long-term horizon, family offices are increasingly looking toward digital assets,” the article says.

“Fifteen percent of family offices in the world and 25 percent in Americas have already invested in cryptocurrencies, according to a recent Goldman Sachs survey. Another 45 percent globally are considering adding crypto exposure in the future.”

Regulations on the Horizon

As the demand for cryptocurrencies is growing strong, so is the rush to regulate them. To this end, Gary Gensler, Securities and Exchange Commission Chairman, has been inviting crypto companies to register with the agency.

Mr. Gensler has previously stated that he considers bitcoin to be a catalyst for change. Furthermore, while he is largely in favor of the crypto market, he thinks it’s impossible for it to survive without regulation. On that note, he gave an interview for the Financial Times on Wednesday and reiterated his stance.

“There are going to be times that people come in and we say: ‘Register,’” Mr. Gensler commented in the interview. “It’s not going to be everybody comes in and says: ‘Can you please tell us we are not a security.”

No Regulations Presently to Guard Investors

Presently, however, there are no regulations introduced by the SEC that would provide any form of investor protection. Against this backdrop, regulations are looking to arrive as every one of the top investment banks is seeing increased demand for crypto. On that note, to offer crypto, banks would need to operate under a regulatory framework.

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