Despite its status as a newcomer in the world of trading and the relative distrust and scorn with which it is frequently met, cryptocurrency has been a part of our economic ecosphere for much longer than many realize.
The first instance of cryptocurrency dates back to the '80s when the young David Chaum invented the DigiCash system and introduced it to the world in 1989. At that time, before computers became a household regularity, the system was ambitious but only somewhat feasible. It took decades for the rest of the world to come around, but in 2009, when Bitcoin was introduced to the market, cryptocurrency finally began to take. In 2024, cryptocurrency is one of the most controversial and topical items on the market. But, many may still need to realize the difference between retail crypto trading and institutional crypto trading.
Wealth, social status, and vocation define these two distinct classes of cryptocurrency traders. Retail cryptocurrency trading is often done through exchanges, which entail much smaller amounts of potential wealth. Conversely, institutional cryptocurrency trading is conducted by much larger corporations or hedge funds, acting with much more significant sums of money and doing so to benefit their institution, thus the befitting name.
Retail cryptocurrency trading is a hobbyist's approach to the market. This trader class is generally an individual with a full-time occupation who is removed from cryptocurrency trading, interested in the market, and partakes in it in their spare time, utilizing their cash and funds. In this way, the cryptocurrency market has become such an institution within the US economy that many see it as equivalent to the stock market. The more apt comparison is the lottery: a system where many participate recreationally for its sheer joy and wish-fulfillment elements. If people take part in the cryptocurrency market, then there's always the chance that they could hit it big and acquire a lot of funds quickly, which keeps people coming back.
Institutional crypto trading is quite the opposite; just like in the stock market, this is done by people working for institutions whose entire business involves cryptocurrency trading. In this way, 'institutional' truly is the perfect moniker for this form of trading. The first people to truly embrace cryptocurrency were the "finance bros" of the 21st century, and they are the ones who are still so wrapped up in it, to the point of investing company funds into it in the hopes of winning big.
Despite its controversial reputation and uncertain future, cryptocurrency has a longer history than it is often credited for. It is poised to remain a significant part of the U.S. economic marketplace for the foreseeable future. Therefore, understanding the key differences between types of cryptocurrency trading and the individuals operating within these distinct lanes is of utmost importance.
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