With more institutional investors indicating interest in cryptocurrencies in recent times, Bank of New York (BNY) Mellon has announced that it would be offering crypto-related services later this year.
Bank of New York To Hold Bitcoin
The New York oldest bank stated in The Wall Street Journal today that it will hold, issue, and transfer Bitcoin (BTC) and other cryptocurrencies on behalf of its institutional clients.
According to the report, the bank will not handle its crypto offerings any different from other traditional asset classes, such as stocks. Notably, the bank is already in talks with its clients to bring their crypto holdings to its platform.
Digital currencies became increasingly popular among institutional clients late last year when the world economies were affected by the deadly coronavirus (COVID-19) pandemic.
Like several other assets, cryptocurrencies were also affected by the virus, which saw the largest cryptocurrency by market capitalization Bitcoin trade below $4,000 in March 2020.
Since then, Bitcoin has developed resistance to the virus and has become amongst the preferred investment choices for most institutional players.
Bitcoin Hits New High
Bitcoin’s impressive price performance has succeeded in luring several institutional players, such as Tesla and MicroStrategy.
However, many institutional investors are still skeptical about BTC investments due to fears about regulatory clarity and the high risks associated with the assets.
As the leading cryptocurrency continues to gain momentum in recent times that saw it set a new all-time high (ATH) above $48,000 with eyes on the $50k mark, more institutional investors had approached BNY Mellon, requesting the bank to offer crypto-related services.
“[Institutional investors] started asking BNY Mellon and their peers to treat digital assets as they would their other holdings,” Roman Regelman, CEO at BNY Mellon’s asset-servicing and digital businesses, said.
Institutional investors are gradually getting the green light that it is safe to invest in cryptocurrencies, as famous firms are already adopting the assets. Earlier this week, the world’s biggest electric car Tesla invested $1.5 billion in BTC.
With BNY Mellon’s crypto offering, it is only a matter of time before similar financial institutions venture into the crypto ecosystem.