Opinion Role of Banks in the Next Crypto Bull Run

Role of Banks in the Next Crypto Bull Run

August 1, 2020

The field of cryptocurrency ventures and crypto entrepreneurs is presently mainly feeling great about themselves. The prices of digital currencies are on the upswing as bitcoin recently broke the 11,000 USD mark. Good times are also felt in the domain of cryptocurrency regulation and regularly change.

Presently, the US federal regulator ruled that cryptocurrencies can be held by banks. The same goes for the other financial vehicles like stock certificates, gold, and similar valuables. This is important because it showcases that the wheels of regulatory changes are definitely in the motion and they do not move against the wider cryptocurrency ecosystem.

This change is also important because it provides a possible entry point to the traditional markets and even more essentially, to the massive institutional players that are otherwise the backbone of the global economy. Because of this, many are certain that the same change is only the start of a much more in-depth evolution. The same process would be able to add an important factor to the next bull run and right now, banks seem poised to enter the next bull run as a much more relevant and visible party.

Crypto Boost

The ruling that the federal regulators made is important for several reasons. Firstly, it is a clear boost to bitcoin and the rest of the big cryptocurrencies. Any kind of positive regulatory movement for the main cryptocurrency network is a great development for all of them and the present situation is no different. Many analysts believe that this is a form of setting the table where banks are looking to both buy crypto but also build up their crypto services. Besides the movement is also generating a lot of chatter about which business entities might get acquired. That is a great opportunity for many crypto startups.

Apart from all that actually get bought by big-time players, others are also going to profit from an enlarged exposition, especially in mainstream media. Presently, companies are already going through this cycle with the entities that are in the running for partnerships with PayPal. Paxos is one of these, but others are being mentioned as well. All of them are getting useful exposition points with the same process.

All Eyes on Anchorage and BitGo

While the PayPal process is ongoing, many crypto insiders are pointing towards different business entities. This is Anchorage, a custody service using an app solution that is run by Diogo Monica. This startup seems to be an almost perfect target for any financial institution that wants to add cryptocurrency custody products to its offer. The same institution would then be also able to offer the product as a white label to other institutions, especially other banks.

BitGo is a bit older company that comes with less buzz, but again, industry insiders are certain that it is seeing a lot of interest. Some are even positive that it too is going to get scooped up very soon. At the same time, the moment is also ideal for BitGo which is trying to remake itself as a full-service cryptocurrency shop.

JPMorgan Chase

The executives of JPMorgan Chase are well-known as having a deeply negative stance on many aspects of cryptocurrencies. While many of these are more than warranted, it is still interesting to hear that this gigantic financial structure is also interested in crypto. The same is further underlined by the fact that their target is nothing shorter than Coinbase, most likely the biggest cryptocurrency company in the US. Here, however, the experts are split. While it is true that JPMorgan has been talking with the company since 2018 and that it is even doing some banking on the behalf of Coinbase, a lot of insiders are adamant that no acquisition is going to take place.

Furthermore, an acquisition of this magnitude, involving a huge traditional financial firm and a heavy hitter in the crypto domain, would be a piece of bombshell news and something that would include insane amounts of groundwork. Not catching any of that groundwork on the financial news radar would be nearly impossible. Yet, even the potential of this rumor being true showcases just how widespread cryptocurrencies have become. In other words, the fact that the possibility of JPMorgan Chase buying Coinbase is being seriously de success in the present moment shows that the branding and image of cryptocurrencies and bitcoin BTC token changed drastically.

Strong Signals

All of this shows a domain where strong signals from traditional financial players are getting commonplace. What was once seen as nothing more than a potential massive scam and then nothing more than a plaything of esports and tech aficionados is not every-more prominent next to the traditional assets and is slowly taking its places right next to things like assets and bonds, even fiat currencies. Right now, big banks are not in any shape or form familiar with buying things like exchanges, no matter if they are crypto varieties or something else.

None of them have this practice down from a business side, but also from regulatory aspects or when it comes to legal matters. No one has to underline just how concerned all banks are about regulatory and legal aspects by default. At the same time, most cryptocurrency companies are not looking to get an IPO or anything similar, thanks to the very nature of the businesses they run. So, these are nothing like natural unions that are just waiting to happen. Yet, that fact does not make them impossible to happen and happen very soon at that.

Slow and Cautious

Beyond the rumors, two things are emerging as true. Banks are definitely more and more interested in crypto. Like any ancient hunting creature of the financial jungle, they feel the prey and know it is there. Ignoring it is not an option anymore. However, as any such creature, they survived this long thanks to being cautious and playing it slowly.

The same will happen now as well and banks will not rush headfirst into anything, including crypto. But, for the cryptocurrency prices and potential upcoming bull run, that is not actually that biggest priority. Instead, the chatter is just as important because it brings the media attention and shines a light not just on the companies, but also the cryptocurrencies themselves. Prices can only benefit from this.