Big Banks Are Eyeing Cryptocurrency Trading Desk Business
It will not be a surprise to see an invasion of big banks and financial institutions to enter the cryptocurrency trading market. This could happen anytime between few months and a year. Some of the banks have already appeared to have started the groundwork for it though they don’t want to confirm it openly. This was also evident from a recent survey confirming the suspicion. The primary reasons are that it is a rapidly growing market and any delay will result in loss of share only.
Recently, Canada-based Thomson Reuters has published a survey on the possibilities of these banks entering the digital currency market in the next one-year period. This indicated that 20 percent of the industry is looking at the potentials of hitting the digital currency trading segment. The significant finding of the survey is that 70 percent of them might come in the upcoming three-six months. It is a clear indication of how the virtual currency market is evolving despite big banks labeling them as betting.
More than 400 clients have taken part in the survey in Thomson Reuter’s platform. This included hedge funds, asset managers, and biggest banks trading desks. Another key factor is that more than 0.3 million financial professionals are enjoying the access to cryptocurrency data. They are doing it through Thomson Reuters’ Eikon platform and included bitcoin, bitcoin cash, and ethereum. These professionals range from hedge funds, asset management, and other institutions.
Cryptocurrency exchange, Coinmetro CEO, Kevin Murcko, pointed out that the banking sector has been indifferent to the digital coin movement historically. For instance, banks have regarded virtual currency as a bubble and an asset meant for criminals and do not have any value. However, the survey demonstrated a different story from what the banks and financial institutions have been saying. This also suggested a gradual shift towards institutionalization of the digital currency market. He expressed the confidence that this will drive to mainstream adoption.
Coinmetro CEO further went to add that “The move to accommodate digital currencies is also a symbolic one; it’s a sign of growing maturity in the market and represents just how far cryptocurrency has come since its days of relative obscurity.” The tightening of regulations in the United States and other parts of the world would be keenly watched by banks and FIs.
Two Banks in Line
There are already two banks in line for a possible entry. One among them is an American firm and the other is a European firm. Goldman Sachs Group is one of the firms that are reportedly in the process of entering the digital currency trading desk. The company has hired Justin Schmidt to head its digital asset markets of securities division. Incidentally, Schmidt was a former quantitative trader. However, the company continued to be in denial mode.
Another financial institution is Barclays. The company indicated that it was looking into the requests from clients for opening trading desk for the cryptocurrency. However, the firm indicated that it could think about only if there is enough number of clients’ interests. That is a clear change from its earlier perception of shunning the sector.