A move by US banks to adopt Bitcoin could be a huge call to legitimize the entire crypto industry and is likely to influence other global banks.
As the cryptocurrency market capitalization almost tops $1.5 trillion, US banks are feeling the pressure from within Wall Street to accept Bitcoin and other digital assets as legitimate assets. According to media outlet CNBC, the United States major financial institutions are eyeing the crypto industry as it continues to disrupt the traditional banking system.
Moreover, the recent move by Tesla Inc (NASDAQ: TSLA) to add Bitcoin to its balance sheet significantly legitimized the crypto industry and likely to compel other companies to follow the same path.
According to CNBC, JPMorgan co-president Daniel Pinto through a Zoom call noted that he is open-minded when it comes to Bitcoin and the entire crypto industry. “If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved,” Pinto told CNBC. “The demand isn’t there yet, but I’m sure it will be at some point.”
JPMorgan has been closely watching Bitcoin, whereby its analysts have a price target of $146K in the long term.
US Banks Likely to Adopt Bitcoin: Bigger Picture
Bitcoin and its huge market capitalization have attracted notable global regulators including the European Central Bank. However, according to European Central Bank President Christine Lagarde, it’s very unlikely that central banks will hold Bitcoin in the near future.
According to Lagarde, Central Banks are working towards stable CBDCs that are regulated. Meanwhile, institutional investors seem attracted to Bitcoin’s store of value as the global currencies inflate at a high rate especially fueled by the coronavirus market crisis.
A move by US banks to adopt Bitcoin could be a huge call to legitimize the entire crypto industry and is likely to influence other global banks. Recently, the Nigerian central bank opted to crack down on cryptocurrency trading. However, talks from the legislative members are ongoing to determine if the move is for the better good of the country.
Global cryptocurrency demand is likely to compel financial institutions not only to adopt Bitcoin and other digital assets but also to build infrastructure to facilitate crypto trading. “For the large banks, the volume of client inquiry and demand at some point will break the camel’s back,” said Damien Vanderwilt, co-president of Galaxy and head of its global markets division. “Banks eventually get strong-armed into developing these products by their clients.”
Furthermore, financial institutions are always seeking ways to make an extra profit at minimal risk. As the crypto industry, particularly Bitcoin, gets adopted by institutional investors, it is expected that its volatility will stabilize with time. Mind you, the Bitcoin futures market has significantly helped institutional investors forecast Bitcoin prices in the near term.
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