The Impact of Institutional Investors' Investment in Bitcoin on its Future

Bachelor Thesis from the year 2023 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,0, Munich University of Applied Sciences, language: English, abstract: The primary objective of this research is to analyze the impact of institutional investors on the future of Bitcoin. By investigating the relationship between institutional investors' intentions and theoretical aspects of the Bitcoin ecosystem's characteristics, a clear overview of the current situation is enabled and provide insights into the potential implications for the future development of Bitcoin. The case studies on prominent institutional adopting Bitcoin are required to identify the purpose of their investment and cluster these into groups. Specifically, the research seeks to achieve the following objectives: Evaluate the impact of institutional investors on the asset's market price dynamics. Examine the influence of institutional adoption on the general acceptance and traffic of Bitcoin network. Identify potential risks and challenges from increased institutional involvement with Bitcoin in the future. Created under the pseudonym Satoshi Nakamoto, Bitcoin, a decentralized digital currency, has gained considerable attention and recognition since its inception in 2009. Bitcoin protocol creates a secure and transparent method of conducting financial transactions without intermediaries, utilizing the underlying technology of blockchain. The transactions, in this case, are data. Bitcoin has transformed from a niche concept of financial inclusion worldwide to a universally acknowledged asset, garnering attention from investors, regulators, and academics alike, who seek to understand its potential influence on tomorrow's financial landscape. In the early days, people wondered whether Bitcoin could survive, as the idea of decentralized money operates against the predominantly centralized existing monetary system. Many countries have warned their citizens regarding the potential threats associated with Bitcoin, citing it being used for criminal purposes and the currency's extreme volatility. Several nations, such as China, have banned using and creating Bitcoin. Despite the difficulties it has faced, Bitcoin has kept going. The initial concept has given rise to a novel crypto industry that now boasts an estimated value of over one trillion dollars. Given its market capitalization, Bitcoin has become one of the most valuable assets globally. No longer do people discuss whether Bitcoin will still exist tomorrow. Today, legislators are discussing regulating the cryptocurrency industry to maximize returns.