Crypto Startups Are Targeting Institutional Investors, But When Will They Finally Arrive?
In case you didn’t realize it during the brutal bear market of 2018, the days of stupid money flowing stupidly into any and every cryptocurrency-related project are over. Now, it’s all about the maturity of the nascent market, and that means institutional investors ‘need’ to step in — a sentiment not lost on some startup companies.
One such startup is Tagomi, a Jersey City-based company of under 20 people that offers a trading platform for institutional investors looking to throw around big bucks. As noted by Forbes, the company boasts an ex-global head of electronic trading at Goldman Sachs and a Harvard grad with experience at Union Square Ventures as founders, alongside a consulting/private equity/venture capitalism expert.
Tagomi apparently works by providing institutional clients with easier onboarding into the world of cryptocurrencies by pooling liquidity from approximately 10 exchanges and finding the lowest prices via algorithms — for a commission of 0.10 percent to upwards of 0.25 percent per trade, of course. Co-CEO Greg Tusar explained:
The current exchange model requires you to prefund your trade. When you want to buy $1 million of bitcoin, we need to have thought through where you’re likely to want to buy.
Tagomi aims to make life easier for institutional investors by storing hefty funds on Coinbase Pro, Gemini, Kraken, Bitstamp, and others.
Of course, “institutional investors” has been a buzzword for, at least, a solid year now. Many people speculate that smart money is still on the sidelines, but others insist that this belief is misguided. The world’s most successful traders and investors buy the bottom and sell the top. To think that institutional investors are not currently playing the game might be foolish. (If they are, they are almost certainly on the short side until a true bottom for Bitcoin hits.)
Current trading volumes underestimate what we see in terms of institutional interest.
What do you think about Tagomi? Are institutional investors playing the waiting game, or are they already here? Let us know your thoughts in the comments below!
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