"Cryptocurrency adoption by institutions and its impact on market"

Assalam O Alaikum

Hello dear friends! Welcome to my post. How are you all? I hope you will be doing well by the grace of Almighty Allah. I'm also fine and enjoying my day. Today I'm here to share my knowledge with you about the "Cryptocurrency adoption by institutions and its impact on market" in this Steem Alliance community. So let's start without any more delay of time.

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Friends, in the past few years, the crypto currencies are gaining the attention of large number of people and the institutions due to their unique features and benefits like Decentralization, security and Privacy. Due to that reasons, the cryptocurrencies are widely adopted by the institutions and investors which have impacted the market in both negative and positive ways. Here, they have increased the legitimately, growth and stability of market but also created some challenges.

The cryptocurrencies like Bitcoin and Ethereum has increased the growth and resilience of institutions in the form of hedge funds and investments. Due to these reasons, major firms from the whole world has invested their funds in cryptocurrencies to get the benefits. Besides them, many other reasons are present which has played a vital role in getting the attention of large institutions and investors and has forced them to invest in digital currencies.

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Among them, the unique features of cryptocurrencies are prominent and the currencies like Bitcoin are compared to gold as they have a potential to stand out during the days of inflation. Also the cryptocurrencies are very easily accessible as they can be found in any of verified digital exchanges, from them, we can buy, sale and trade our digital currencies and get benefits. These things adds more value to the crypto currencies.

In this way, the digital currencies allow them to validate their transactions in more secure, smooth and transparent way due to the presence of blockchain technology and decentralized networks as the cryptocurrencies are operated on them. But now, the decentralized finance DeFi and in the development of blockchain technology, has forced the institutions to think more about crypto currencies, their potential and benefits.

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When the crypto currencies are adopted by the wide range of institutions and investors, they can affect the market dynamics in both positive and negative ways and among them, the impact on the stability of digital currencies is more prominent. So, when the cryptocurrencies are adopted by a large number of institutions, the stability of market increased as they bring more liquidity of assets which reduces market volatility.

We can say that, the institutions has a great role in making the market more liquid and volatile as they holds a large number of digital assets within the market. When the prices of digital currencies are stable and less volatile, the more people can show their interest in digital currencies by investing in them through the trading and also by holding a specific amount of digital currencies in their wallets.

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Furthermore, the involvement of institutions in the landscape of cryptocurrencies has a great impact on the prices of digital currencies as when they buy a high amount of crypto currencies at a same time, it results in an increase of their prices as their demand increases. In results, we can say that the influence of institutions in cryptocurrencies is very crucial as they have a huge impact on them.

Despite all these advantages, several challenges are associated with the involvement of institutions in the landscape of cryptocurrencies, as when an institution holds a large number digital currencies he can be a central authority of crypto market as he can affect the market negatively by manipulating the market and then buying assets at low prices and selling them at high.

Conclusion

In conclusion, we can say that the when a large number of institutions holds a large number digital currencies, it becomes like a double edged sword which can be affective and dangerous for others at the same time. As where they can make the more liquid during the buying and selling of their assets, on the other hand, they can make the market more volatile on the behalf of their assets. In future, we can say that the institutions become more mature and friendly for the market.

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Written by @abdullahw2

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