John Matonis believes that it is more logical to call stock markets a bubble, not Bitcoin

John Matonis, co-founder of the Bitcoin Foundation and executive director of VISA, said that the entry of large banks and financial institutions such as Goldman Sachs into the crypto space will serve as a boost to Bitcoin's liquidity and, ultimately, the price of Bitcoin.

“For people who say Bitcoin is a bubble, I would say Bitcoin is the pin that is going to release the bubble!” he said publicly. The bubble, in his opinion, is the stock markets that are being inflated with all their might by central banks.

Matonis is confident that crypto assets  have high liquidity, and the development of futures and options markets will lead to the emergence of an interest rate market around Bitcoin.

When will the banks come in?

Today the cryptocurrency market is extremely volatile, both in terms of growth and in terms of decline. One of the reasons for the high volatility is low liquidity. The daily volume of cryptocurrency trading has decreased significantly since the significant correction occurred in January.

The significant decrease in the daily volume of bitcoin sales has allowed whales and large traders to manipulate the market. futures market, which has been one of the reasons for the sharp decline in prices in recent times.

Recently, the Chicago Stock Exchange (Cboe) proposed to the US Securities and Exchange Commission (SEC) to allow US exchange-traded funds (ETFs) on US stock markets such as Nasdaq and the New York Stock Exchange (NYSE) The entry of players such as Goldman Sachs into the crypto market will lead to institutional flocking into this space. investors.

Currently, interest from institutional investors in the United States is quite high, but there is no actual funds flowing into the cryptocurrency market from this financial sector. In Japan, such investors invest quite a lot of money in the crypto industry through trading platforms.

However, it is unclear when large financial institutions will be ready to enter the market?

 Recently, thanks to the efforts of the media and the politics of social networks, the image of the cryptocurrency market in the public mind is associated with roulette. in a casino or a fraudulently inflated bubble. If the pressure in this aspect continues, if the media continue to compete in wit, playing up the theme of tulips or the gold rush of the Wild West, then this market can only be saved by the entry of serious, convincing financial structures into it... 

If the market begins to recover, banks will need to be prepared to meet the growing demand for new financial instruments and technologies.

Bear Cycle

In a bear cycle,  financial institutions are hesitant to enter the market unless they want to establish themselves at the forefront of crypto development before their competitors. It will take some time, perhaps a couple of months, for large banks to enter the crypto space. But with their arrival, the cryptocurrency market will be equipped with significant funds for liquidity and guarantees for public investment.