Crypto Institutional Order Flow Remains A Tiny Market

October 3, 2019 11:00 PM
Entire cryptocurrency industry market cap is just over USD 220B
Crypto industry should focus on products with low regulatory burden
Crypto industry should focus on building products that allow sector participation
Crytpo and Bitcoin Market Cap Story of Day






In A Relatively Low Volume Session, We Wanted To Point Out An Obvious, But Frequently Overlooked Factor When It Comes To Crypto Companies Producing Solutions To Attract Institutional Adoption - Crypto Remains A Relatively Tiny Market, Products That Require Firms To Invest In Infrastructure Or Regulatory Discovery To Participate Will Be Facing An Uphill Battle

Crypto Takeaway: 

According to Coinmarketcap, which if anything inflates figures, the entire cryptocurrency industry market cap is just over USD 220B. To put that in perspective, there are currently 22 S&P 500 companies that have a valuation larger than the entire crypto market.

When we consider institutional solutions that require clients to invest in wholesale operational or regulatory changes, we ask ourselves, 'would Fund ABC invest in a new operational/regulatory infrastructure to trade Chevron stock (which also has a 220B market cap)?' The answer is likely no and Fund ABC would in all odds look at other opportunities that fit within current operations.

Of course, crypto and BTC conceivably have far more upside if their use case is played out (not to mention downside if it does not), so the comparison is not quite apples to apples. However, we believe the reminder is a useful exercise and has remained steadfast that the crypto industry should focus on building investment products that allow sector participation without requiring an infrastructural or regulatory burden (the educational burden is quite enough). As we have said many times, this is a large part of the reason FRNT's focus has been on building a broad suite of licensed, cash-settled derivatives targeted to institutional participation to incentivize adoption.

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets. You can subscribe to FRNT Financial Morning Note at