While pessimists continue to want the so-called “Bitcoin bubble” to burst, the premium cryptocurrency continues to grow to new heights, apparently with each passing day. For example, in the same week that Tesla announced its entry into the crypto market, Bitcoin (BTC) increased by nearly $ 10,000.
And even though the market subsequently faced a correction, things changed for the better as soon as the news that BNY Mellon, the oldest private bank in the United States, entered the crypto fight, sending the largest digital currency by market capitalization. total on an upward trajectory once again.
In this regard, the banking giant, with $ 2.2 trillion in assets under management and $ 41.1 trillion in assets in custody and / or administration, announced its decision to hold, transfer and issue Bitcoin and other cryptocurrencies as an asset manager. on behalf of its clients, potentially exposing this asset class to an entirely new section of investors.
Another reason for the current moment may be the payments giant Mastercard, announcing its decision to allow its user base to use encryption in its 30 million merchants. In addition, on February 11, PayPal announced its plans to expand its cryptocurrency offering recently introduced to the UK market. In addition, the company’s mobile services subsidiary, Venmo, also revealed that it is planning to launch digital asset services for its 29 million users in the coming months.
What does BNY Mellon’s entry into the market mean?
According to reports, BNY Mellon is looking to manage cryptocurrencies using a platform that is currently in its prototype phase. In this regard, it has also been reported that the system will also be able to handle a wide range of traditional holdings, such as treasures and shares.
It also appears that the financial institution has not described for which crypto assets it will provide its custody services. In addition, BNY Mellon has already deployed a team of executives, led by Michael Demissie, to encourage the integration of cryptocurrency custody and management into the bank’s existing product suite.
Speaking with Cointelegraph, Hank Holland, founder and managing partner of private equity firm Pegasus Growth Capital and former managing director of Merrill Lynch, opined that, as an established and trusted private bank and one of the largest custodians serving registered investment advisers , BNY’s commitment to custody Digital assets are a necessary and predicated step towards broader investor acceptance and adoption of BTC and other cryptographic assets:
“The strategic initiative addresses two important obstacles. First, for the average investor who doesn’t want to manage a private key, BNY’s custody solution provides a familiar ‘ramp’ to own BTC. Second, for a financial advisor to recommend an allocation for BTC and digital assets, the investment needs to be on your platform. Thus, enabling them to charge a consulting fee. “
The first exposure for most BNY customers, according to Holland, will be to buy BTC to incorporate the asset into its strategic allocation overview. However, the customer’s initial purchases can be followed by other investments in an actively managed portfolio of several digital assets, as well as loan / deposit strategies to complement their regular income streams.
Likewise, Marcos Benítez Rubianes, Gazprombank’s customer relationship manager, told Cointelegraph that the news confirms the growing general acceptance of Bitcoin’s traditional financial system – the oldest and most liquid cryptographic asset – adding:
“We have witnessed a ripple effect since Paypal announced the integration of cryptography on its platform. Now in 2021; on the one hand, you have one of the most valuable companies in the world, Tesla, acquiring BTC for your balance sheet and, on the other hand, the oldest bank in America, providing Bitcoin services to your customers. “
In addition, Rubianes is confident that, in the near future, more traditional players will embrace Bitcoin as an asset, perhaps even as a means of payment, especially as their customers will feel the need to stay up to date and will pressure these institutions to provide them with greater exposure to encryption.
Is the rise of Bitcoin a foregone conclusion?
With Bitcoin now starting to hit the $ 50,000 limit, it is worth investigating the question of whether a bullish may be looming on the horizon. On the subject, Antoni Trenchev, co-founder and managing partner of Nexo – a crypto loan and exchange service – told Cointelegraph that one thing is when a technology company like Tesla embraces BTC, but it’s a whole new game when the oldest creditor in the US does this, adding: “The clashes between generations are always fascinating to watch. Banks that follow suit, and many will inevitably do so, will simply come in second. “
Rubianes believes that another increase could occur if more financial institutions take a step towards the integration of cryptography. If that happens, he believes that interest in space can potentially increase tenfold. “Those in the crypto space clearly understand that one of the most significant barriers to adopting cryptography has been, perhaps ironically, the self-custody part,” he added.
However, not everyone shares this narrative. Alexander Suhobokov, head of fintech at Dukascopy Bank, based in Switzerland, told Cointelegraph that, while a gradual integration of cryptography and the traditional financial industry is actively underway, banks that do not keep pace over the next one or two years will face a real risk of losing their competitive advantage, it is highly unlikely that this news will have a major impact on BTC:
“There is a much greater chance that the value of the BTC is under strong pressure as an externality of regulators’ decisions on the USDT. Let’s hope that these possible disturbances do not impair the potential of cryptography. “
So, what to expect from Bitcoin?
Following the commitment of BNY, Mastercard and PayPal to explore the crypto landscape more closely in the near future, Twitter – home to Jack Dorsey, the man behind the financial services company Square – recently confirmed that it is looking to offer its employees the possibility of receiving their wages in Bitcoin.
In addition, the social media giant’s chief financial officer, Ned Segal, said the company is exploring the option of adding BTC to its existing balance sheets. However, he believes that much of this will depend on whether or not there are enough people interested in conducting BTC transactions with the technology company.
Finally, Daniel Pinto, co-chairman of the large US investment bank JPMorgan Chase, said in a recent interview that the company will eventually also have to get involved in Bitcoin. “Demand does not yet exist, but I am sure it does. be at some point, ”he added.
Overall, looking at the sentiment around space, it appears that there is confidence growing around the BTC’s chances of reaching the important $ 50,000 psychological barrier, especially as the main cryptocurrency continues to successfully clear the bearish momentum that sent the digital asset value for as low as $ 46,110 over the past 24 hours. As a result, BTC is once again sitting comfortably around the $ 48,000 mark.