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BitcoinSistemi 2024-12-26 06:33:09

If Big Companies Buy Altcoins Like XRP and HBAR, Will Their Price Increase? Analyst thinks Otherwise

Cryptocurrency analyst Jake Claver made statements about the cautious yet significant entry of institutional investors into the cryptocurrency market. While retail investors often speculate that institutional participation in assets like XRP and HBAR will trigger major price swings, Claver argues that institutions are already deeply entrenched in the market and are operating with sophisticated strategies to maintain vigilance and stability. Unlike individual investors who depend on public exchanges, institutional investors use Over-the-Counter (OTC) desks to execute large trades without triggering significant price movements. These brokers allow institutions to build significant crypto positions while keeping their activities out of the public eye. Claver highlighted two key strategies that institutions use to optimize operations: Time Weighted Average Price (TWAP): This strategy averages out the price by spreading trades over a period of time, preventing sudden market spikes. It is ideal for buying or selling millions in crypto without causing noticeable market disruptions. Volume Weighted Average Price (VWAP): An algorithm-based approach that times trades according to trading volume, targeting optimal market moments to secure better-than-average prices. It helps institutions trade within certain price bands, buy on declines, and minimize slippage. “For example, an institution investing $50 million does not make a single purchase,” Claver explains. “Instead, they spread the purchases out over days or weeks to avoid market volatility.” Related News: Experienced Analyst Reveals: “For Bitcoin Price to Surpass $108,000...” One of the main reasons institutions prefer OTC desks is liquidity. Executing large trades on public exchanges can lead to large slippage, where the last purchase in a series costs significantly more than the first due to price increases. “OTC desks break large trades into smaller pieces and coordinate orders across multiple brokers,” Claver said. “This results in stable prices, lower fees, and better execution for large trades.” Moreover, secrecy is essential for institutions. These transactions are not immediately reflected in public order books, and the market only becomes aware of their existence when prices tend to rise or fall gradually over time. Claver noted that contrary to the belief that institutions are waiting for regulatory clarity or market maturity to enter crypto, they are already active. “There are large institutions that have quietly accumulated significant crypto positions without causing major volatility,” he said, adding: “When you see sharp market moves, it’s usually individual traders reacting to the news, not institutions buying or selling.” According to Claver, institutions are moving long-term using tools and strategies that are not typically accessible to retail investors. Claver concluded: “The market is playing at a level that most people can’t see. The next time someone says, ‘Institutions will enter the market soon,’ remember, they have already entered.” *This is not investment advice. Continue Reading: If Big Companies Buy Altcoins Like XRP and HBAR, Will Their Price Increase? Analyst thinks Otherwise

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