Trillion-Dollar Financial Institutions Look To Adopt Crypto

Updated: 27 June 2023

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Prominent financial institutions in the United States, managing a staggering $27 trillion in assets, are actively exploring opportunities to provide their clients access to Bitcoin and other cryptocurrencies.

Major US Financial Institutions Embrace Crypto

Leading asset management firms have begun to embrace digital assets, acknowledging their potential as an investment class.

Meltem Demirors, Chief Strategy Officer of CoinShares, revealed on June 26 that several prominent financial institutions managing an astounding $27 trillion in assets had expressed their intent to venture into the world of digital assets.

1/ last week's @BlackRock spot Bitcoin ETF filing was big news!

but, it's not the only story. many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.

a quick glance – $27 trillion of client assets here! pic.twitter.com/azmHZmUL2a

— Meltem Demirors (@Melt_Dem) June 26, 2023

These include noteworthy developments like BlackRock’s Bitcoin spot ETF application and Fidelity’s introduction of crypto wealth management solutions.

Additionally, JP Morgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco, and Bank of America have all showcased their interest in this domain.

Demirors highlighted the active efforts of these major US financial institutions to facilitate access to Bitcoin and other cryptocurrencies.

However, she also noted that while institutional involvement is progressing, it is happening at a measured pace rather than an abrupt surge.

This shift in attitude toward digital assets marks a significant milestone as traditional finance players increasingly recognize their transformative power and long-term potential.

Massive, Positive Impact on Crypto Space

In the past, institutional investors approached cryptocurrencies with caution due to concerns surrounding market volatility, regulatory uncertainty, and security risks.

However, these concerns have gradually eased as the crypto market matures and regulatory frameworks evolve.

While the entrance of asset management firms into the crypto space is significant, it’s important to note that only a fraction of the amount is likely to be allocated to crypto investments.

Will Clemente, the co-founder of Reflexivity Research, echoed Demiror’s viewpoint by highlighting that Bitcoin’s market capitalization is less than $600 billion.

Between HSBC, Blackrock, Fidelity, and Schwab we are talking about $25 trillion in assets under management that will soon be enabled to buy Bitcoin.

Bitcoin is just a $600 billion market cap asset today, let alone tightly held/lost coins.

It's not rocket science.

— Will Clemente (@WClementeIII) June 26, 2023

As more institutional investors allocate a portion of their portfolios to digital assets, it is likely to attract greater liquidity and enhance market stability.

Earlier this month, BlackRock’s application for a Bitcoin exchange-traded fund on June 16 resulted in a surge of filings for similar products.

This trend further solidifies the notion that institutions are increasingly drawn to Bitcoin as an investment asset.

In line with this, the ProShares Bitcoin Strategy ETF (BITO) witnessed its highest weekly inflow in a year, resulting in its assets under management surpassing $1 billion.

The Bitcoin Futures ETF $BITO had its biggest weekly inflow in a year as assets top $1b again. It also traded half a billion in shares on Friday, which it's only done about 5 times before via @SirYappityyapp pic.twitter.com/Xrq0lUaaTO

— Eric Balchunas (@EricBalchunas) June 25, 2023

BTC’s price also reached a new all-time high for 2023, hitting $31,185 on June 2. This surge can be attributed to investors’ growing confidence in the cryptocurrency market.

As the crypto market develops and regulatory frameworks become more established, there is a potential for increased institutional participation within the crypto space.