The old saying, “If you can’t beat them, join them” seems to be gaining traction within the traditional banking sector in regards to cryptocurrencies.
On Monday of this week, Bank of America announced that it will be initiating research coverage of Bitcoin and cryptocurrencies for large investors and analysts – issuing its first research report on programmable money titled Digital Assets Primer: Only the first inning. According to the Bank of America researchers, they took this action because they determined that Bitcoin and cryptos are “too large to ignore.”
“Bitcoin is important,”
said Alkesh Shah, head of Global Cryptocurrency and Digital Asset Strategy in a corporate statement,
“but the digital asset ecosystem is so much more. Our research aims to explore the implications across industries including finance, technology, supply chains, social media, and gaming. Our view is that there could be more opportunity than skeptics expect.”
The Bank of America statement went on to note that cryptocurrencies currently have a market value worth more than $2 trillion with more than 200 million+ users globally. The researchers further acknowledged that hundreds of companies have been created within the crypt asset class. An asset class that has the potential to transform virtually every type of industry by reducing transactional friction and boosting operational efficiencies.
And then on Tuesday, US Bank announced that it was establishing asset custody services for Bitcoin. This offering is specifically aimed at large private fund holders and institutional investors who want to safely secure their Bitcoin with a third-party, rather than store it themselves in a “hot” wallet online or via a self-custodial “cold” storage wallet such as Trezor or Ledger wallets.
“Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years,”
said Gunjan Kedia, vice chair, U.S. Bank Wealth Management and Investment Services in the corporate announcement.
“Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency and, in response, we made it a priority to accelerate our ability to offer custody services.”
It’s reported that as of June 30th, US Bank Wealth Management and Investment Services had approximately $8.6 trillion in assets under custody as well as $282 billion in assets under active management.
These combined moves by two of the largest banks in the world reinforce the opportunity and value of the cryptocurrency asset class. It’s ironic that Bitcoin and its blockchain were originally created as a peer-to-peer payment method intended to supplant the interests and centralized control of “Big Banking and Fat Finance” – which seem to be unwittingly warming up to a potential harbinger of their demise. As with so many things in crypto these days, we’ll have to wait and see how this plays out.