As Bitcoin’s (BTC) bullish rally seems in the mood to resume, all eyes are now on the queen of crypto-currencies and her numerous court. At the same time, more and more “classic” financial institutions appear to want to recruit “crypto-experts” and other “bitcoin specialists”. At stake is a paradigm shift and a change of mood among the world’s biggest money makers who, aware that they are being overtaken, are increasingly talking about blockchain, tokens and decentralized finance.
Bitcoin from public enemy number 1 to a model to follow
It’s a fact: the banks tried to kill Bitcoin and crypto… and failed. Now, willy-nilly, they are slowly embracing this technological as well as monetary revolution. The fact that the very recent Bitcoin ETF (BITO) set the New York Stock Exchange on fire on the first day of its introduction is a clear demonstration that the general public and institutions are now in demand of crypto products, even if they are “derivatives”. Furthermore, the technology behind digital payments is mechanically forcing the financial system to evolve. As a result, banks feel their power weakening and want to regain control.
So today, the banking industry is fighting to catch up by offering customers different ways to invest in Bitcoin and cryptocurrencies. Most importantly, banks want to compete in this new world and profit from it. Their approach is twofold: experiment with crypto offerings and lobby regulators to create rules that will work in their favor.
Some are offering cryptocurrency investments to their high net worth clients. Others are weighing in on trading platforms. JPMorgan, for example, doesn’t want to miss the Ethereum revolution.
Banks struggle to catch up in the Bitcoin race
Now, instead of warning regulators about cryptocurrencies, banking industry representatives are complaining that regulators didn’t act quickly enough and that their inaction cost banks valuable time. A sweet irony!
In fact, it is the entire so-called “traditional” financial ecosystem that this general skepticism has caused to lose precious time, and while decentralized finance is gaining momentum, the old economic world is lagging behind.
While there are noticeable developments, senior executives of the largest US banks are still not very enthusiastic about digital currencies. JP Morgan’s boss continues to be skeptical, and even if the time when he called Bitcoin a “fraud” seems long gone, distrust remains. More recently, he called Bitcoin “worthless”.
We also recall that three years ago, Bank of America CEO Brian Moynihan banned the company’s wealth managers from putting their clients’ money into cryptocurrency-related investments. What a contrast, when Bank of America just explained that Bitcoin’s growth was “only in its infancy.”
Also at BoA, some executives are more willingly embracing the crypto revolution. After years of privately ridiculing Bitcoin, Bank of America COO Thomas Montag asked one of his friends for a tutorial on cryptocurrencies. He also spends hours listening to lectures, reading books and meeting with crypto executives.
An alternative financial system is emerging. Crypto startups are beginning to take the place of traditional banks by offering credit cards and loans. Individuals and businesses around the world are adopting digital currencies at a rapid pace. Even governments are getting involved. El Salvador, for example, recently declared that it will accept Bitcoin as legal tender and that the future of bitcoin mining (BTC) will be written in El Salvador.
