Crypto Moves #6 – They Are Here
Following the genesis block of Bitcoin in January of 2009, banks and other financial institutions avoided any involvement with crypto for over a decade, only to occasionally cast a very negative light on crypto in the media. This tarnishing of crypto’s reputation peaked towards the end of 2017 during this period of widespread market growth.
However, during the recent bull market in 2020 and 2021, it seemed that many banks and financial institutions had learned valuable lessons, leading to a considerable reduction in overt pessimism in the media towards crypto. The evidence indicating the permanence of crypto was arguably clearly apparent, making it pointless to bash crypto as harshly as in past years, particularly in 2017.
While most banks and financial institutions refrained from publicized comments, only a handful took genuine steps into the crypto sphere during this period. Primarily, it was US-based banks with a robust institutional clientele, including names like BNY Mellon, State Street, and Goldman Sachs, along with a select few European banks, that either initiated a modest crypto offering or announced plans to do so.
In the industry, however, the transition from a lack of institutional involvement in crypto to the participation of a few institutions was widely celebrated by a collective shouting of: “The institutions are here“, as if every institution was diving headfirst into the crypto market. This was not the case, but the market arguably overestimated the level of institutional engagement due to the rapid shift from virtually none to a limited number of institutions entering the space.
This turn from being trashed-talked to being acknowledged by established financial institutions held much greater signal value to the space than the actual number of banks involved or the limited buying pressure caused by their offerings. The latter was particularly true given the relatively modest crypto offerings, if any, launched by these institutions during this period, other than just announcements.
From signal value to buying pressure
This is clearly about to change.
The crypto industry can breathe a sigh of relief as institutions enter the crypto space, even as the industry continues to lick its wounds after last year’s contagion. The industry does not appreciate the European Union’s MiCA framework enough, if at all. Few seem to know what it is, yet it will be vital in shaping tomorrow’s crypto industry.
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