Bitcoin was launched back in 2009 as an emerging and innovative digital asset, leading to crypto’s rise in popularity. Bitcoin is a digital and decentralized medium of exchange. Transactions made by Bitcoin users are verified and recorded in a digital public ledger known as the blockchain. Back then, traders, companies, and banks had their doubts and speculations on the legitimacy and success of Bitcoin. Financial expert Warren Buffet criticized the cryptocurrency and said that it was a massive investment risk. He even compared Bitcoin to a poisoned square.
In 10 years, the market value of Bitcoin substantially increased from $0 to a whopping price of $37,175. Its market capitalization is now priced at approximately $690 Billion. The growing opportunity that Bitcoin and other cryptocurrency offers enticed traders to place their money in this promising digital currency. Trading platforms are being developed, giving traders other options to invest their money. Bitcoin and other cryptocurrencies are coined as high-risk investments. Given its volatile nature, a rigorous trading method is recommended.
The attention that Bitcoin is acquiring now reached mainstream media. Further, enthusiasts are speculating greatly on its daily market trend. Presently, even big banks express their support and plan to enter the cryptocurrency and the blockchain mania. Financial experts believe that this is the time for big banks to go into cryptocurrency and blockchain. The future innovative financial technology and new investment strategy are going in that direction.
What are the financial institutions and banks take on cryptocurrency and blockchains?
Citibank’s consideration of the cryptocurrency market is because of a surge in its clients’ interest in digital currency. According to Forbes’s report, Itay Tuchman, Citibank’s global head of foreign exchange, the company has not yet fully decided on the type of cryptocurrency they would offer. However, trading, custody, and financing are on their top considerations.
In the 108 page report of Citibank, the company expressed its position that risk and challenges may always be tethered to cryptocurrency. Nevertheless, the company is optimistic that cryptocurrency may be the preferred currency for global trade soon.
Goldman Sachs and JP Morgan
The digital way to make and invest money is taking over the traditional way, and big companies recognize it. Sachs and Morgan are set to open a department assigned to research and predict cryptocurrency trends.
Traders and sales personnel of JP Morgan expressed their desire to handle cryptocurrency opportunities. As a response, its global markets head Troy Rohrbaugh escalate these concerns to Daniel Pinto, JPMorgan co-president. According to insiders, Pinto signified his open-minded stand regarding cryptocurrency. He mentioned that when the time comes that a large chunk of their investors, customers, and traders are already going into the crypto trade, the institution had to be involved. Pinto’s team is already studying the demands, hence the creation of the new department.
Goldman Sachs opened their doors for cryptocurrency enthusiasts Mike Novogratz in a private event. Novogratz discussed his plans for cryptocurrencies and other digital assets in the said event.
Steve Chiavarone, Federated Investor’s portfolio manager, expressed his support in blockchain technology and mentioned that blockchain would pave the way for the fourth industrial revolution. Federated Investors is starting to promote the advantage of using blockchain technology to their big clients and shareholders. They even claim that companies adopting the science of blockchain are seeing a great return in their investments.
Silvergate Capital publicized its cryptocurrency offering back in 2019, offering $13 per share. At present, an open position is priced at around $90 per share. The bank is famous for its Silvergate Exchange Network (SEN), a virtual payment system that works 24/7 and 365 days a year. This system is an advantage for cryptocurrency traders as the market is open round the clock. Based on the 2020 financial report, Silvergate Capital now has $59 million worth of cryptocurrency transactions, equivalent to 90,000 trade transactions.
Bank of America
Bank of America is already successful in its blockchain researched and adaptation with its leading 50 blockchain patents. In addition, the bank made a major step by offering their clients the possibility of using blockchains for secure and convenient financial investments and transactions.
The most recent Bank of America’s cryptocurrency venture is their collaboration with Paxos Settlement Service. Paxos Settlement Service is the third regulated cryptocurrency bank in the world.
Swiss Investment Bank: UBS
UBS expressed its interest in the opportunities that cryptocurrency presents. The bank mentioned their interest in the technology behind cryptocurrency, particularly the public ledger technology or blockchain. UBS will soon offer cryptocurrency investments to its clients and stakeholders. However, as UBS is also considering the market volatility and risk of cryptocurrency, they would only allow a small portion of their client’s total assets to be placed into these investments.
NYC’s Signature Bank
Signature Bank leaped on the cryptocurrency market by launching their digital payment system known as Signet. Signet uses blockchain architecture in allowing Signature bank’s client on the network to transfer and receive funds simultaneously.
According to the latest survey published by Forbes, 60% of cryptocurrency owners would use their bank offerings of the digital asset. The same study also indicates that 68% of cryptocurrency owners are interested in Bitcoin-based debit or credit cards. Since its introduction, uncertain regulations and financial institutions’ hesitations have made Bitcoin and other cryptocurrencies challenging and risky. But as consumers and traders express their massive interest in this growing digital asset, banks, and financial companies must keep up and leap into digital technology.
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