Bitcoin price surge will come from retail, not institutions: Fireblocks CEO

However, while many hope that institutional involvement in cryptocurrencies will drive prices further, Shaulov noted that this may not necessarily happen.

“When institutions participate in the market in a quiet manner, they are able to do so almost without affecting the price,” Shaulov told Cointelegraph during Australia Blockchain Week.

Shaulov said that mid-2020 saw a “massive inflow” of institutional money, but prices didn’t really appreciate until retail investors frantically bought crypto assets later in the year.

“These institutions are mature enough to acquire (BTC) slowly and use algorithms that don’t drive the market up despite the massive inflows.”

Instead, “50% of the growth (from) is coming from the retail industry (…) because they have less sophisticated ways of engaging and have wild price swings,” he explained.

That said, Shaulov pointed out that the “physical properties of Bitcoin” — mainly its limited supply — mean that any large-scale purchases of Bitcoin will eventually act as a boost.

“It will certainly be easier for some institutions that are not currently participating in the market to add bitcoin to their allocation.”

Why Bitcoin?

Interestingly, Shaulov, who founded Fireblocks in 2018, believes that the story around Bitcoin is still “playing out” in these institutions.

Today, Shaulov said, there are many arguments based on Bitcoin that are still at play: Is it a hedge against inflation? Is it a public reserve currency? Is this a hedge against government financial misconduct?