If cryptos are crashing, why is investment in Blockchain soaring?

Q&A with Jonathan Cho continued

Investment in any industry increases when prices in it soar. Investment in the mining industry, for example, typically reaches its highest mark at the top of each bull market, and into the first part of the bear markets that follow.

That said, the reasons for investment in this case vary a bit. Hedge funds are moving into the space to chase returns. Banks are opening digital currency trading desks not, as is commonly assumed, to buy cryptos en masse but simply to trade them, both short and long, just as they would any other asset they believe they can make money in, and because they can generate commissions by satisfying client demands for crypto trading. TJ


Banks and institutions in other industries that by and large act as ledger-keepers are increasing investment into the space because they must. Blockchain and DLT threaten their very existence, as DLT makes centralized ledgers obsolete.

This kind of “obsolescence-prevention” investment should not be confused with investment in Bitcoin or cryptos in general, because these institutions are primarily interested in DLT itself, not in the cryptocurrencies built on DLT nor the ICO companies that use DLT to raise money for DLT-based businesses.

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