What scares institutional investors?

Research firm Tabb Group released a report on Tuesday that said cryptocurrencies could become "officially established" in 2018, but for now institutional investors are being put off by the risks associated with the market.

According to recent research, hedge funds, pension funds and large investors will start trading cryptocurrencies as soon as three hurdles are overcome.

Monica Summerville, head of Europe at Tabb Group, said: “We know that there is a significant amount of accumulated institutional funds that are not in circulation. They are waiting for the right conditions to enter the market, and we expect that to happen this year.”However, For now, large hedge funds and asset managers are reluctant to move into the new sector. Consulting firm Mercer, which works with pension funds and other investors, said in February that cryptocurrencies are a bad investment.

According to a report from Tabb Group, three important elements are holding large investors back:

Clarity of regulations - Cryptocurrencies are currently very loosely regulated, but many of the world's legislators are already exploring how to better control the growing market. 

Institutional level data - unlike large markets, there are no clear rules regarding what data needs to be declared (and this is also due to the confusion of global regulators).

Enterprise-oriented infrastructure - unlike traditional equity investments supported by exchanges, brokers and trustees, all of this is just beginning to be introduced into the cryptocurrency market.

However, According to Tabb Group, the cryptocurrency market is finding new ways to attract institutional investors. Last year, major exchanges Cboe Global Markets and CME Group launched Bitcoin futures, and banks are also starting enter the market. And Goldman Sachs, which has previously avoided working with cryptocurrency, announced earlier this month that it was opening a platform for cryptocurrency trading.

According to https://www.fnlondon.com