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21 October 2020
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What are the best cryptocurrencies to buy in October?

  • Institutional investors are looking to substantially hike their stakes in major cryptocurrency, mostly Bitcoin
  • Bitcoin, Ethereum and LINK are all well-positioned to benefit from a new crypto bullish trend
  • 32% of surveyed participants expect hedge funds to drastically increase their crypto holdings

A new crypto study performed by crypto asset insurance firm Evertas, showed that institutional investors are looking to substantially hike their stakes in major cryptocurrency, mostly Bitcoin (BTC), but other crypto assets as well. Here, we take a look at which digital coins are likely to benefit the most in case another wave of crypto starts this week.

Fundamental analysis: Institutional investors bullish on crypto assets

The survey, which involved 50 institutional investors that together hold more than $78 billion in digital assets in the United States and the United Kingdom, showed that around 26% of participants think that pension funds, insurers, family offices and sovereign wealth funds will dramatically increase their stakes in crypto.

Accordingly, 64% of participants think the surge in interaction will be weak, however, they also believe that hedge funds will be more involved in crypto. Nearly a third (32%) of surveyed participants expect hedge funds to drastically increase their crypto holdings. 

Institutional investors are looking interested to raise their Bitcoin holdings as well as other digital currencies because they think regulations in the crypto market will get better in the future. 

Some also expect the market to grow and offer better liquidity, something that the majority of institutional investors demand. A bigger and better market will also include a broader range of instruments for institutions to invest in.

However, the study also pointed to several obstructions on the road to crypto institutionalization. Over 50% of the respondents voiced their concerns over the lack of insurance for crypto assets, while some of them are not satisfied with the quality of custodial services, trading desks, reporting facilities and the procedures of other companies operating in the crypto industry.

“Our research shows that institutional investors are enthusiastic about increasing their exposure to cryptocurrencies and crypto assets in general, but there are clearly many issues regarding the infrastructure that supports these markets that still concerns them. These clearly need to be addressed if the full potential of investment from institutional investors in crypto assets is to be realised,” said J. Gdanski, Chief Executive and Founder of Evertas.

On the other hand, prospects on regulating Bitcoin and other cryptocurrencies are not as optimistic for other crypto sectors. 

These other sectors are decentralized finance (DeFi) and stablecoins, which have grown dramatically this year and are likely to face their own regulatory challenges in the future. 

“Since DeFi protocols are designed to be permissionless, anyone in any country is able to access them without any regulatory compliance. As a result, DeFi can easily become a haven for money launderers,” said blockchain analytics company Ciphertrace.

Even though Bitcoin hasn’t rallied after its halving event this year as many expected, institutions didn’t lose interest in the top cryptocurrency. Trading volume for Bakkt’s Bitcoin futures hit a new high of over $200 million worth of contracts exchanged, meaning that institutional investors are still accumulating BTC.

At the same time, mainstream fund managers are also coming into the market, one of the indicators that the majority of Evertas survey respondents consider a major factor in the institutional adoption of crypto.

Given that investors are showing more interest in cryptocurrencies and their regulatory scenery is becoming more evident, institutional investors are expected to continue to show interest in those assets.

3 cryptocurrencies that are likely to gain in October

Bitcoin

As the world’s most valuable digital coin, Bitcoin price tends to lead the way and move higher in the initial phases of a new bull trend. If BTC/USD can continue to trade above $10,500, the chances are solid that the digital coin may start moving higher as early as this week. 

Bitcoin price daily chart (TradingView)

In this case, the BTC buyers will be aiming for $11,200, $12,200, and $13,800.

Chainlink (LINK)

After trending in a continuous downtrend since mid August, Chainlink (LINK) price has started to recover this week. Despite it falling to a 2-month low earlier this week, the buyers successfully erased all losses and pushed the digital coin to trade more than 10% higher on the week.

LINK/USD price weekly chart (TradingView)

LINK is now well-positioned to continue recovering higher. Targets higher for investors looking to buy LINK are $12.15, $13.65, and $15.15.

Ethereum

Ethereum (ETH) price has managed to stay above the 2-month ascending line at $350.00. The buyers will need to push above $365.00 – the horizontal bull/bear line – before considering levels above the $400 handle. 

Ethereum price daily chart (TradingView)

The 100-DMA provides additional support at $330.00. On the upside, traders looking to buy Ethereum will aim for $390.00, then $415.00, and potentially 445.00.

Summary

A recent survey by digital asset insurance company Evertas showed that institutional investors are planning to dramatically raise their stakes in Bitcoin (BTC) as well as other cryptocurrencies in the future. Bitcoin, Ethereum and LINK are all well-positioned to benefit in case another wave of crypto buying is initiated. 

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