Cryptocurrency is becoming a larger slice of global financial markets, and for good reason. As it currently stands, the market capitalization of the five largest cryptocurrencies - or cryptos, for short - sits at approximately $200 billion, around ten times the roughly $20 billion it reached in January 2017. Even while that may be considered low for any currency, cryptos have proven themselves as an emerging asset class that offers exposure to disruptive technology, as well as an increasingly popular option for portfolio diversification.
Retail investors have been the first to accept and embrace cryptos as an asset class, with an estimated 26 million crypto owners in the United States alone. As the number of retail investors buying into various cryptoassets increases, the abundance of potential opportunities to create efficiency, security, and a more digitalized global market rises with it.
Given the breadth of potential talking points around the topic, it will be essential to stay focused on only a few. This paper aims to shed light on three things:
1. Why retail investors are interested in cryptoassets and the underlying technology
2. What crypto companies are doing and have already done to gain more retail exposure
3. And what that may eventually mean for financial institutions (FIs) who will have to accommodate their clients’ crypto preferences.