Is the big bullrun coming soon?
According to Rebecca Harding, a financial journalist and author of the book "The Weaponization of Trade: The Great Unbalancing of policy and economics," major financial institutions are just waiting to enter the crypto market.
Harding is, among other things, CEO of Coriolis Technologies, a technology company that provides services to large banks and companies in the traditional financial sector. She said in an interview with Forbes employee Billy Bambrough that the vast majority of banks had a healthy skepticism and curiosity.
It explained that banks have recognised the need to invest in the market to keep up with developments in cryptocurrency and blockchain. At present, however, they are waiting for the green light from supervisory and financial authorities.
"Banks are optimistic about cryptocurrencies and are just waiting for regulation of the crypto market to be able to invest."
"Goldman Sachs, Citigroup and Morgan Stanley on the sidelines"
As CCN reported, Goldman Sachs, Citigroup and Morgan Stanley, three of the largest investment banks in the U.S., have already developed a wide range of products, including a trusted custody solution for institutional investors in the cryptocurrency market.
Morgan Stanley is said to have developed the infrastructure for providing complex derivatives tied to bitcoin, with a plan to launch bitcoin swap trading once enough demand from institutions is in place.
To remain relevant in fintech, Harding said banks are working closely with newly emerging fintech companies to study the cryptocurrency market.
"Many banks are still sceptical about Bitcoin and blockchain. While they see the need to invest in this area to keep up with technological developments, they are waiting for market regulation. They are working closely with fintech companies to ensure they don't miss out on connecting to the new technology. There will be a lot of money going into blockchain and cryptocurrencies, ' she explained.
In July, Yonhap, an established media conglomerate in South Korea, reported that commercial banks in the country hold more than $2 billion in bitcoin and Ethereum. The Bank of Korea, the country's central bank, said in a report that the amount has invested banks in cryptocurrencies is relatively small compared to their investments in other stock markets. But local investors have expressed optimism given that leading banks hold a significant sum of cryptocurrencies.
"Banks are worried"
Harding stressed that the number of banks investing in cryptocurrencies is growing. Banks see the risk of their business models being replaced by blockchain technology in the coming years if they fail to meet the needs and demands of millennials and the new generation.
' Banks are at risk of becoming nothing more than big fintech companies, people in the industry are telling me. '
If a leading market like the US makes a change in crypto regulation to further legitimise the cryptocurrency market, experts believe more banks will acquire cryptocurrencies than long-term investment (exchange-traded Bitcoin ETF).