Speculation surrounding Wall Street and cryptocurrencies continues to be at the heart of crypto markets. It is being reported that Wall Street interest in crypto is as an all time high.
Although the general crypto markets have seen an 80% decline throughout 2018, Wall Street firms are showing particular interest in bitcoin and crypto related products such as, crypto custody and asset management.
In a recent study by Sanford C. Bernstein & Co. analysts have found that strong performance on crypto exchanges combined with 2018 bear market has led to rising demand for bitcoin and crypto products from an increasing number of Wall Street firms.
“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms,” the analysts told Bloomberg.
Will Wall Street enter crypto
Because of increasing demand on cryptocurrency exchanges, like Coinbase, Binance and Robinhood, with the former launching a number of new products such as Coinbase Custody. Analysts now believe it is a matter of ‘when’ not ‘if’ as to Wall Street entering cryptocurrency markets in some way or another.
The increase demand will flow out into Wall Streety firms and they will be simply unable to not delve into the crypto markets, whether it is by creating exchanges, launching custody products or assets management ventures.
Wall Street v Bitcoin ETF
The majority of investors believe that a bitcoin exchange traded fund (ETF) is what is needed for the current bear market to reverse. A bitcoin ETF most would for certainly invite new money into the crypto markets, but most importantly institutional money. Many believe the pending application with the SEC currently from VanEck could be the key to a crypto market revival.
The SEC have however, pushed back the decision on the long awaited bitcoin ETF. Many investors have took this a s negative sign.
But how does a bitcoin ETF compare to the influence of Wall Street firms?
Lets not forget, Wall Street firms represent some of the largest firms in the world. With the largest and richest clients across the globe. Adoption from Wall Street firms would not only see a lot of new money enter, but would also take us closer to mass adoption. Which is argued as the most important thing for bitcoin and cryptocurrencies.
If we were to edge close to mass adoption then we may well see prices rise more than a new bitcoin related product launching.
Are banks important?
In the early days of crypto it was debated that bitcoin and other cryptocurrencies will; replace the banking sector. This seems Avery tall order considering the power and influence some of the major banks have on thew world.
Realistically we are more likely to see the two work in conduction with one another. It is no secret that a number of banks across the world are actively offering crypto trading accounts and access so to crypto to their customers.
Already, some of the largest banks in the world have begun to disclosed their ongoing initiatives to serve clients interested in cryptocurrencies as an asset class.
In June, the newly appointed CEO and chairman of Goldman Sachs, David Solomon, said that they have been exploring the possibility of providing cryptocurrency-based derivatives. Whilst also revealing for the first time that Goldman Sachs have been clearing Bitcoin futures on behalf of their clients.
“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too,” Solomon said.
Banks have arguably the biggest user bases, should the larger banks began to offer avenues into crypto trading then it would be a huge vote of confidence for digital currencies. This would likely see increases in the price. However, a number of banks have announced such features this year ad the markets have still declined.
Only time will tell which industries will have the biggest impact.
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