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Michael Novogratz, the founder and CEO of Galaxy Digital, perceives the current state of the crypto market as sluggish, primarily due to minimal engagement from institutional investors.
In a discussion with CNBC, the American investor remarked that the market is devoid of excitement, as the majority of recent activities stem from retail investors while larger entities are pulling back.
“To be honest, crypto is sluggish, I’d say. There’s a steady demand from retail. We’re observing it across all platforms, and there’s not much institutional enthusiasm at the moment, so the slow days of summer began early in crypto. Does it make me excited? That’s just the reality,” Novogratz stated.
Lack of Enthusiasm From Institutional Investors
Novogratz’s comments echo a report from CoinShares dated May 31 regarding weekly crypto asset flows, which revealed that digital asset investment products experienced outflows of $39 million from institutional investors for the sixth week in a row, amounting to a total of $272 million.
Bitcoin has been the primary focus of these outflows, with a total of $11 million, while Ethereum saw outflows of $5.9 million. Funds for Algorand, Litecoin, and Uniswap also recorded outflows of $8 million, $500,000, and $200,000, respectively.
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The United States led the outflows, with Germany and Switzerland closely following. In total, 0.8% of assets under management exited the crypto market last week.
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Adoption Still On the Rise
Despite the downturn in institutional adoption, Novogratz pointed out that “interesting” developments are still occurring in the crypto sector. The Galaxy Digital CEO highlighted the increasing adoption of cryptocurrencies in Asia, especially in Hong Kong and China.
The largest Chinese social media platform, WeChat, has recently incorporated Bitcoin price quote indexes in its search functionalities. The platform’s 1.3 billion users can now access the digital asset’s price quotes despite the ongoing crypto ban in the nation.
Moreover, Hong Kong has now permitted retail crypto trading through regulated exchanges. The Hong Kong Virtual Asset Consortium has approved the top 30 cryptocurrencies by market capitalization for listing to facilitate straightforward reviews and compliance from the exchanges.
“There are a few developments that occurred today which are quite interesting. WeChat just enabled Bitcoin and crypto trading on the largest single platform in the world. That’s a significant milestone. Hong Kong is officially allowing crypto trading for retail customers through regulated exchanges for the first time, and so we’re witnessing Asian adoption,” Novogratz added.
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