According to a recent report by Deutsche Bank, Bitcoin is ranked third among the world’s currencies in terms of financial investment. This month, the cryptocurrency exceeded the level of 61 thousand dollars, and its capitalization confidently surpassed the trillion dollars mark .
The combination of bull run and a sharp rise in the popularity of BTC has led to the fact that now the asset is almost impossible to ignore, even at the level of the management of the largest banks in the world.
Journalists from the news outlet Decrypt collected information on the position of seven well-known banks in relation to the crypto market and Bitcoin itself.
Citigroup was one of the first large banks to enter the cryptocurrency market. In 2018, CitiGroup introduced several new investment vehicles that allowed clients to capitalize on fluctuations in the price of Bitcoin without having to actually own the coins.
Most recently, the bank released a cryptocurrency research report claiming that Bitcoin is «at a tipping point» for mass adoption. In addition, CitiGroup has highlighted some concerns – most notably storage, capital efficiency, insurance, and the environmental impact of cryptocurrency mining. However, in general, the bank’s management maintains a positive position regarding the potential of BTC and believes in the further growth of the coin’s popularity.
Bank of america
While CitiGroup is generally positive about Bitcoin, the same cannot be said for Bank of America, the second largest bank in the United States. In March 2021, he released a report to his clients in which he sharply criticized cryptocurrency, arguing that because its supply is controlled by a small number of people – that is, early investors – Bitcoin is not an appropriate hedge against rising inflation.
Comparison of energy consumption of the Bitcoin network and some countries
In a report titled Bitcoin’s Dirty Little Secrets, Bank of America analysts argued that BTC «remains extremely volatile, making it impractical as a store of value or payment mechanism.» Like CitiGroup, Bank of America also highlighted the environmental impact of cryptocurrency. The experts noted that its annual energy consumption is comparable to that for the whole country. In this case, it was the Netherlands.
The position of Morgan Stanley on the crypto market can be traced in the actions of the bank: in January, it acquired 10 percent of the shares of MicroStrategy, which became one of the first large investors in Bitcoin last year. Overall, Morgan Stanley increased its ownership of MicroStrategy securities by 500 percent in just a few months. That is, it shows the confidence of bank analysts in the future growth in the price of Bitcoin, which will also affect MSTR shares.
Change in MicroStrategy share price in the last 6 months
Then in March, Morgan Stanley announced plans to support three bitcoin funds for their wealthiest clients. In other words, the bank takes BTC very seriously as potentially one of the most popular investment vehicles of the future.
Experts from the second largest German bank, Commerzbank, are studying the blockchain, but earlier representatives of the institution have already called Bitcoin an exclusively speculative asset. However, this month, Commerzbank’s Venture Division participated in funding rounds for Curv, an Israeli cryptocurrency startup.
Curv was subsequently acquired by payments giant PayPal, which announced the integration of Bitcoin and several altcoins into its system last year.
One of the oldest US banks, Goldman Sachs, is due to open a trading floor for cryptocurrencies this month – in this case, bitcoin futures.
In general, Goldman Sachs first announced plans to create a cryptocurrency platform back in 2018, but then postponed this idea amid a sharp drop in the price of BTC. By 2020, statements from bank representatives were full of skepticism, they even denied that Bitcoin was an asset class, cautioning hedge funds against cryptocurrency trading and citing the lack of a serious investment rationale.
However, in the summer of 2020, the leadership of Goldman Sachs again began to change its position on the crypto market. The bank also owns the securities of Tesla, a company that recently made a $ 1.5 billion investment in BTC. We can say that Goldman Sachs can now benefit from the growth of BTC too.
Jp morgan chase
One of the largest investment banks in the world, JPM Chase, has gone full circle from rejection to being interested in their views on the world’s most popular cryptocurrency. In 2017, JPM CEO Jamie Dimon called Bitcoin a «scam» and even said he would fire any JP Morgan trader caught trading the coin. But over the years, the bank’s opinion softened, and in the company’s recent report from January 2021, it was even predicted that Bitcoin would rise to $ 146,000.
CEO JP Morgan Chase Jamie Dimon
In December 2020, strategists at JP Morgan Chase invited insurance companies and pension funds around the world to invest $ 600 billion in Bitcoin, following the lead of MassMutual Fund. In other words, JPM no longer has the same «hatred» for crypto as it once did.
BNY Mellon, one of America’s oldest banks, has had a poor start to cryptocurrencies. In 2016, the bank allegedly transferred over $ 100 million to an account linked to the OneCoin pyramid scheme, according to reports released last year . But in February 2021, BNY Mellon, which controls nearly $ 2 trillion in assets, took the bold move by announcing plans to store and manage BTC and other digital assets on behalf of its clients.
As you can see, banks are gradually moving from skepticism to interest in Bitcoin. This is facilitated by a new trend in the development of the crypto market and the rapid rise in prices of digital assets after the start of the COVID-19 pandemic last year. BTC has become one of the most profitable investments in the last couple of years, so it is highly likely that in the future even more large financial institutions will become interested in the crypto market.
This assumption is especially relevant against the background of the fact that Tesla began to accept bitcoins as payment for its cars. This means that other companies will soon do the same.