For blockchain and cryptocurrency to achieve their full potential, financial advisors and institutional investors must play more active roles in the industry than they are doing at the moment. These particular group of stakeholders have so far been more of observers acting as bystanders that may be waiting for the appropriate conditions to step into the marketplace.
As at the time of writing, the total cryptocurrency market capitalization stands above $518 Billion, having reached a record of $700 Billion earlier this year. This is a market size that will improve exponentially assuming these big players are not left out.
A market too risky
Unlike individuals and other smaller investors whose volumes and limited size of investment make them more tolerant of the risks that currently exist within the crypto market, financial advisors and other heavyweight investors might not have the luxury of bearing such associated risks. The level of security of investments that this class of investors seek to make them comfortable in participating in the cryptocurrency market does not yet exist within the space.
Existing blockchain exchanges can be applauded for the transparency and security of transaction that they offer. Also, the other benefits of the distributed ledger make them attractive and worthy of the disruption that the industry is currently experiencing. However, the lack of responsibility exhibited during periods of eventualities makes it difficult for large investors to commit to such systems. A few cases where there have been breaches in the wallets of exchanges, or a negative impact on them due to external factors such as regulative measures have seen investors left out in the cold. Therefore, the basic issue surrounding institutional investors and their non-participation in the cryptocurrency market is risk implied.
Decentralization and proper risk management
Legolas exchange is introducing a hybrid model that employs the basic qualities of the decentralized ledger technology of blockchain and the centralized systems of traditional banks. This system will permit the a fair, bank-backed premium exchange for institutional investors. At the same time, it will incorporate a decentralized ledger within its proprietary centralized platform, guaranteeing the inalterability, temporality and transparency of the order book and ensure a fair trading environment.
This project is enhanced by the partnership between Legolas and Luxembourg based BankQix. This partnership will ensure the safe depositing, withdrawal and conversion of large sums of both fiat and cryptocurrencies. This is a development that will not only offer extensive flexibility of service, but will also instill a lot of confidence on the safety of funds for investors.
An adoption friendly platform
Another incidence that is key to how the cryptocurrency industry develops is the attitude of governments and regulatory agencies towards it. One determinant of how these governments and agencies are disposed to the emerging crypto industry is the level of safety that it offers the public. Several bans and restrictions have shown up at various times, especially within the past one year. These have come with the colouration of ensuring a stable industry where the interest of participants is protected. Due to the absolute non-regulation of the blockchain ecosystem that powers most cryptocurrencies, the authorities have been reluctant in fully adopting the system. The best we have seen so far is banks and institutions running test models of aspects of the technology.
The balanced approach and implementations introduced by Legolas is bound to exorcise the doubts that currently exist among these agencies. The resultant effect would be a friendlier approach, and improved adoption and implementation of the technology.
Therefore, having achieved a total of 1504 BTC during its token PreSale, Legolas is embarking on a public sale in order to raise 2000 BTC, making a total cap of 3504 BTC. This will enhance the development of the robust hybrid system that would guarantee more participation within the industry, especially for institutional investors, resulting in the overall development of the crypto industry as expected.