RETAIL VS INSTITUTIONS: Who is in a better position?

The word “retail” is often used in a derogatory way, undervaluing the individual who has not much money. Or who buys in small quantities. The institutional wholesaler is placed in a position of more power and control… or is he?

In the world of crypto currencies we see typical behaviours of the traditional environment, economies of agglomeration and scale are very relevant and end up benefiting those who are better prepared. A retail investor with slightly above average capital (allowing them to cover costs, enter with minimal capital, etc.) can obtain interesting returns, unlike an institutional one that has numerous diversification criteria, hedging and other restrictions.

Developers often prefer to prioritize the growth of the real user base over investors, especially when they are sufficiently capitalized. It is true that priorities always need to be balanced, but really we all need to ask ourselves the question, what is my investment useful for?

Yes, that is where the retail investor comes in. Coming in with a small amount of capital, small, but valuable in terms of profitability and usefulness to the project. On other occasions, the most valuable thing is to enter as a lead investor, the one who puts up the money to pay salaries and expenses of first necessity. The retailer is given access when the most important thing is already developed.

We come to the conclusions. Which is better, retail or institutional? Having exposure to both is a good idea, especially if the institutional to which you give some of your money gives you access to joint investments or you simply focus on learning. When the preparation is sufficiently robust, it becomes very lucrative to move a small amount of capital that is intended to grow.

At Belobaba we are very clear about the advantages of being a retailer and wholesaler. So we cover institutional risks and then share the best projects with the community, in phases of development that are more beneficial for the retailer.