The absence of High Net Worth Individuals (HNWIs) has kept crypto markets hovering at a relatively modest $220 billion total market cap. However, recent stability in bitcoin prices poses the question of whether markets are growing to be mature enough for serious money to make an entry.
But there is far more than this to consider. Institutions have to follow strict rules as to where they decide to invest their clients’ money. Most crypto exchanges and vaults do not offer satisfactory security standards – a cold wallet that can be lost, on a network which could see a 51% attack does not fly – and so custody has to be better.
And does crypto have adequate liquidity? Currently, no not really. Not very close to institutional money requirements, anyway, and this is another issue that needs to be solved. How governments approach regulations is also a hot topic and these need to be clearly defined and enforced before crypto becomes a viable asset.
Demand should find its way into spot prices but this depends on a token’s utility, which needs to carry proven functionality and probably has to be live on a platform. Speculation has before maintained altcoin prices at levels which could be far removed from actual value; the climate has changed and markets approach maturity with emphasis on value in utility instead.
How to marry financial services with crypto
Startups raised $5.6bn in ICOs over the course of 2017 but the market has changed drastically since then and retail investors are less willing to part with cash to speculate on projects. Wisely so, as there are now thousands of altcoins which brings difficulty in confidently finding value in any one of them.
With an increasingly wary crypto community, the move towards a stable, mature market could be underpinned by HNWIs and institutional money. But they most crucially need a secure and regulated entry point and this is the space looking to be occupied by EQIBank.
It is the first fully licensed bank to offer traditional financial services – banking, custody, lending, settlement and clearing – alongside a crypto exchange. The idea follows that one integrated platform allows for the versatile management of money in a range of ways.
Solving the obstacles to attracting big money into crypto markets is part of EQIBank’s plan; it offers solutions to concerns over regulation and security while its native platform EQI Token utilizes the full advantages offered by new technology.
As an exchange of value, tokens can be sent for low fees to anywhere in the world in a matter of minutes. This has potential to save institutions a ton of money: system-wide costs for settlement exceeds $1.41 trillion at present and banks often eat up around 7% of low-value remittances with fees and exchange rates before it reaches its destination.
Leading to a more efficient future of financial and banking services
EQIBank emphasizes this aspect, to cheaply and quickly transfer money to anywhere in the world. When intending to transact with a party in say, Afghanistan, different banking standards mean that Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance can be lacking which serves to complicate the process.
The new bank believes it can offer the key to creating conditions for serious investment into crypto through an integrated compliance platform, named EQI Check. All EQIBank clients must pass KYC and AML requirements on-platform which makes it far easier to crosscheck individuals across the network.
Should it be able to attract a different level of wealth, then the bank’s EQI Token will offer clients the settlement of transfers at a much faster pace and without nearly as many fees, especially for cross-border payments.
As retail investors continue to curb their speculative enthusiasm, it can be hoped that bitcoin and others will continue to find relatively stable price points. If we can rid the markets of FOMO and FUD then it is possible we will start to see the real value of these coins. Serious financial players may then begin to consider diversifying into crypto.