Who Has the Power, Retail or Institutional Investors?

The following article originally appeared in Institutional Crypto by CoinDesk, a free newsletter for institutional investors interested in cryptoassets, with news and views on crypto infrastructure delivered every Tuesday.

The "Wall of institutional money" that most of us were breathlessly expecting in early 2018 was supposed to push the price of bitcoin and other assets "To the moon," and savvy retail investors would tag along for the joyous ride.

Most hold retail money: the vast majority of institutional assets under management are held by pension funds, mutual funds and insurance companies.

When the clients of pension funds, investment advisors, mutual funds and the like ask about crypto assets, then a broader base of institutional investors will scramble to get informed.

Crypto assets and their virtues are being dangled in front of millions of retail investors with a series of media pushes.

Retail interest momentum seems to be building, but the "Tipping point," in which it is loud enough to get a broader swathe of the institutional sector to start investing in crypto, may be a way off yet.

Rather than treat the two pools of demand as separate, those of us focusing on institutional interest need to keep an eye on retail developments.

Just as the institutional sector needs retail interest to trigger a deeper commitment, so does the retail sector need the institutional channels.

Without the support and oversight of institutional partners such as trusted advisors, familiar brokers, mutual fund managers and pension fund allocators, most retail investors will probably not feel comfortable enough to take the plunge on their own.

Retail investors may be increasingly noticing and digging into cryptocurrencies - but for this interest to hit scale, they need institutional support.