When new capitals will break into crypto market?

Dear Steemitians

The regulatory agencies of Europe and the USA are now on the verge of legalizing this market.

In the meantime there are already officially approved bitcoin futures and will soon be released on ethereum, while more than 200 funds are currently investing in the major cryptocurrencies, competing with the main American platforms, which have just opened custody services for large capital.

In short, pending a final legalization (now 99% certain), the presence of all the necessary tools to invest would be more than enough to already premise the entry of new capital.

And yet, never before has the crypto market is lazy ...

To try to understand the phenomenon, I looked around and I discovered that on Wall Street it is not the first time that the entry of institutional capital is organized into a new market.

On the contrary, it is a completely ordinary activity that is carried out in a similar way, whenever the need arises.

It is therefore very probable that the "programmed capitalization" of cryptocurrencies will follow the same script as in previous times.

Observing the times and the speed with which the same operations have been done in the past, we could hypothesize by analogy on how the same phenomenon could happen in the crypto market.

In fact, it seems incredible, but in these days, just as the (very slow) capitalization of the crypto is taking place, another huge market is the object of a similar activity.

So we can formulate our hypotheses by observing a phenomenon much more 'close, indeed, contemporary to us.

If you allow, then I take the luxury of proposing this topic to readers, aware that this is an absolute exclusive, as far as I know, in the publishing industry.

This is the entry of Western institutional capital into the huge Chinese stock market.

Many people in fact ignore that the Shanghai and Shenzen stock markets form a stock market which is under only the United States Wall Streets.

Even fewer people know that until a few months ago the capital of Western countries that invested in this market were equal to ... zero.

In fact, it is difficult to believe, but only from May of this year the MSCI, the index of world markets, will include a small fraction, just 5% of "A shares" ("A shares", ie Chinese mainland companies traded in Shanghai or Shenzhen in local currency), in the MSCI Emerging Markets index basket.

Ultimately, the second largest economy in the world will be represented at the end of August for only 1% of the total basket.

And it is very likely that the MSCI contemplates the complete inclusion of the remaining "A shares" with the same very cautious times with which the other inclusions occurred in the past.

For example, the complete inclusion of the Taiwan stock exchange took place over 5 years, from 1996 to 2001.

It is therefore possible to think that this time the second world economy will be represented in the MSCI index with a prudent step.

Returning to our initial speech, it seems to me that here different analogies with the cryptocurrency market jump to the eye:

in both cases it is a market with enormous potential ...
markets enormously ignored by the "capital that counts"
with a certain propensity to create political problems ...
but so important as to make their inclusion on Wall Street almost "inevitable"

And if these analogies count for something, now it is perhaps easier to understand the reason for such slowness on Wall Street to let the capital that count in the cryptocurrencies enter.

Now we know that it is a very common slowness, which tends to prevent the inclusion becomes an opportunity for speculation.

However, the same MSCI article is dedicated to this operation:

"The" bumps "will be avoided in different ways. For example, the Chinese Central Bank will quadruple the daily trading limit, while the Hong Kong Monetary Authority (HKMA) will provide ample liquidity to the offshore market with a series of supporting measures, continuing the regulators' efforts in the progressive opening of the market . "

So when it comes to Wall Street, then, we can conclude that the entry of institutional capital into a new market is always calmed in every way (and not only - let's say it frankly - to avoid speculation, but also to prevent American securities from losing their their importance in the face of securities or assets with a significantly higher potential).

We will therefore have to expect the same brakes also in the marriage between Wall Street and the cryptocurrencies.

The crypto market currently has so little liquidity that 50,000 dollars are enough to create a strong rise in a mid-cap crypt.

The share of capital that makes trading operations has just equaled that of the capital that is invested in the long term (it is discussed here). Which means a greater presence of capital in platforms not "tamed" by Wall Street.

In addition, of the 17 billion bictoin still available, 5 are in the trading platforms (previous point), 6 are in long-term custody accounts and 6 belong to the famous "whales", the mysterious non-institutional manipulators who created the speculative bubbles of the last years.

So now, Wall Street finds itself with this doubt:

if it starts to introduce new capital, with the same gradualness that the MSCI has always adopted, whales, given the lack of liquidity of the market, will exploit them equally to create speculative bubbles.

But as long as Wall Street has not entered a share of domesticated capital that could outweigh those of "whales", the market will never control it ... so that money must come in some way!

That's why his maneuver is still so slow and undecided.

Wall Street is simply trying to solve a problem by trying to reconcile the irreconcilable ...

So, wanting to draw conclusions, in light of all this, we can say that these big capitals will follow the same script adopted by MSCI with Taiwan and soon with China?

Well, given the speed with which the crypts burn the stages, I would bet on 3 years at most.

Attention, then: the cryptos burn the stages, but they never override them ...

So far, for example, bictoin, the most "old" cryptocurrency, has faithfully followed all the phases of any financial cycle that preceded it.

Of course, for him 1 year of life corresponds to 10 years in other economic cycles, but his cycle is respecting the evolutionary phases of any other, while speeding them to the maximum.

So, in my opinion, the inclusion cycle that we have described with the example of the Chinese "A shares" will be respected by bitcoins and other crypts, even in unpredictable ways and at a supersonic speed.