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Institutional Investor Meaning

A large organization that trades large volumes of assets on behalf of its members or clients. This category includes pension funds, insurance companies, hedge funds, and sovereign wealth funds.

These entities have access to massive capital and use sophisticated trading strategies and tools. The entry of institutional investors into a market is often seen as a sign of "legitimacy" and "maturity." Their involvement brings "deep liquidity," which helps stabilize prices and makes it easier for other participants to enter or exit large positions without causing massive price swings.

Institutions typically use "custodial" services-third-party companies that specialize in the secure storage of assets-to meet their internal compliance and insurance requirements.

Their "long-term" perspective and "buy and hold" strategies are often viewed as a stabilizing force in the otherwise volatile crypto markets.

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