Are private banks ready to accept cryptocurrency investments?
Whether or not private banks see the value of cryptocurrencies, their customers do see it.
The Devere Group study found that by 2022, 68% of high net worth individuals (hnwis) will invest in cryptocurrencies.
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Does this mean that private banks will soon have no choice but to use cryptocurrencies to meet customer expectations?
Private bank's view of cryptocurrency
According to a survey by Fidelity Investments, 22% of institutional investors have already made a certain exposure to digital assets, and 47% believe that these assets have a place in their portfolio.
Ahmed Ismail, co-founder of Hayvn, a cryptocurrency exchange for institutional markets, said: "As regulatory and compliance requirements increase, investor confidence in digital assets occurs. A huge shift."
“Institutional investors we have talked to are interested in asset classes, but they may be reluctant to get involved because of bad practices and perceived risks (such as fraudulent transactions and opaque fees).”
Iqbal Gandham, UK managing director of Etoro, added: "This positive sentiment reflects our daily conversations with high net worth individuals and institutions.
“Until recently, crypto assets have provoked the curiosity of institutional investors – they have now noticed.
“It is clear that high net worth individuals have always had demand, and we are increasingly seeing large institutions such as pension funds and endowments, taking asset classes seriously.”
What will cryptocurrencies worry private banks?
Cryptographic currencies are still affected by security and stability issues, and private banks and other institutions see it as an obstacle.
Last time, Bince, a cryptocurrency exchange, was hacked, causing $410 million in bitcoin losses.
Commentators admit that such incidents are worrying, but they don't think they should keep private banks away from cryptocurrencies.
R_my Jacobson, CEO of Bunker Capital Blockchain Consulting, said: "I want to know, the timing of hacking, coupled with the recent shackles and the fiasco of Bitfinex, will bring uncertainty to institutional investors and weaken the final It seems that the level of trust is getting better."
"However, I am still optimistic about Bitcoin."
“Binance hackers are no different from any other market movement we have seen in the past few months and are already active.”
"The most interesting part of the recent surge in the market value of the bitcoin and encryption markets is that despite news about Tether, Bitfinex and Binance, the overall price is still rising," said Vabihav Kadikar, CEO of Closecross Derivatives Trading Platform.
“This shows that the market is becoming more and more mature, and it may be the guarantee that more institutional funds will flow into the market.”
What else does cryptocurrency need?
Ahmed Ismail said: "The missing link is custody."
“In order for private banks to feel comfortable entering the asset class, you need to provide a guarantee of the traditional capital market structure. Institutional investors enter the field faster than before, thanks to the compliant, regulated actors that investors trust. Joined."
Hefren is trying to be such a regulated role to provide this. Ismail and his co-founder Chris Flinos emphasized the importance of institutional money flowing into cryptocurrencies to help quell the notorious price volatility.
Flinnors added: "The asset class is no longer dominated by opportunists seeking high-risk and high-yield, and the image of 'Western Wildness' is outdated."
“With the interest of more and more mature institutional investors, violent price volatility will be resolved, bringing more confidence to the asset class.
“Yes, this is a process, but it starts with guardianship, safety and supervision.”
Which private banks already offer cryptocurrency?
The most compelling entrant in the world of cryptocurrencies can be said to be Julius Baer, which in February 2019 announced a partnership with FinTech's Seba Crypto to provide storage, trading and investment solutions for cryptographic assets.
Next up are Swiss private banks Falcon and Vontobel, which launched a transfer and hosting solution in January.
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