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Are Some Banks on Wrong Side of History on Cryptocurrencies?

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Banks and other financial institutions who still refuse to recognise major cryptocurrencies, such as Bitcoin, as a legitimate asset class are putting themselves on the wrong side of history, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The bold observation from Nigel Green, chief executive and founder of deVere Group, comes despite the cryptocurrency market shedding more than $1 trillion in a week after all-time highs, which have prompted some financial institutions to speak out on the likes of Bitcoin.

However, the world’s largest cryptocurrency advanced as much as 19% on Monday.

Mr Green says: “Bitcoin, amongst other digital tokens, has had a hugely impressive run over the last six months, so it’s not surprising that there’s a period of consolidation and short-term correction in such a hot market.

“We can expect market turbulence of this nature to continue until it fully matures and there is even greater institutional investment.

“But if you zoom out on the charts and take a look, they show that Bitcoin and Ethereum, the two biggest cryptocurrencies, have consistently been on an upward trajectory over the longer-term – but no financial market ever moves up in a completely straight line, yet the upside direction is clear.”

He continues: “As such, I find it baffling that some banks have decided to refute the legitimacy of cryptocurrencies.

“By doing so, they are not only placing themselves on the wrong side of history, but they’re not providing clients access to the potentially significant opportunities of key digital assets that could define the future.

“Of course, cryptocurrencies are not for every client – but neither is any investment. Therefore, a refusal of one particular asset class seems somewhat peculiar.”

He goes on to say: “The blistering pace of the digitalisation of economies and our lives means that from now on there will be a growing demand for digital, global, borderless money.

“Indeed, digital currencies have already changed forever the way the world handles money, makes transactions, does business, and manages assets.

“They are becoming an integrated part of the mainstream financial system, which is evidenced by more and more Wall Street giants, social media platforms and multinationals, amongst others, becoming increasingly actively pro-crypto.

Mr Green, who has long been an advocate of cryptocurrencies, is one of the leading voices calling for greater regulatory scrutiny of the market.

Last week, he said that the U.S. Treasury Department’s new, stricter cryptocurrency rules underscore how the likes of Bitcoin are becoming increasingly mainstream.

“I believe that this is recognition by those running the world’s largest economy that cryptocurrencies, in some form or another, are the future of money. The genie can’t be put back in the bottle,” he noted.

He went on to say that he believed it could be the first significant step towards global regulation.

“It is inevitable as the market grows and matures.  Proportionate regulation should be championed. It would help protect investors, shore-up the market, tackle criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries that introduce it.”

The deVere CEO concludes: “When everything from voting to entertainment is already digital, dismissing digital currencies in a digital era as part of a properly diversified portfolio, to my mind, seems a little archaic.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Coinbase Cofounder Issues Serious Crypto Price Warning As Bitcoin ‘Death Cross’ Fear Spreads

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Bitcoin and cryptocurrency prices have struggled last week with the crypto market’s combined value slipping under $1.5 trillion—down from $2.5 trillion in May.

The bitcoin price, after getting an unexpected boost from Tesla billionaire Elon Musk last weekend, has resumed its decline over the last few days, falling back toward $30,000 per bitcoin.

Now, as bitcoin charts show the price 50-day moving average has fallen below the 200-day moving average—a pattern known as the “death cross”—Coinbase cofounder Fred Ehrsam has warned “most” cryptocurrencies and crypto-assets “won’t work” and “90 percent of NFTs” will have “little to no value in three to five years.”

Bitcoin’s “death cross,” despite its ominous name, appears to be a lagging price indicator. The last time the trading pattern occurred in March 2020, it heralded a huge bitcoin bull run that helped even smaller cryptocurrencies surge to all-time highs.

“People are going to try all sorts of things,” Ehrsam, who has gone on to found the blockchain investment firm Paradigm since leaving Coinbase in 2017, told Bloomberg this week, warning many of those smaller cryptocurrencies won’t survive. “There’ll be millions and millions of cryptocurrencies and crypto-assets, just like there were millions and millions of websites. Most of them won’t work.”

Coinbase, the San Francisco-based bitcoin and cryptocurrency exchange, went public this year at a huge $100 billion valuation but has since seen its market cap plummet, falling by a third amid waning interest among retail traders and global regulatory pressure.

Since bitcoin was created in 2009, thousands of cryptocurrencies have been created with crypto data provider CoinMarketCap currently counting just over 10,000 different coins.

Some, such as ethereum, the second-largest cryptocurrency after bitcoin with a market capitalization of $250 billion compared to bitcoin’s $660 billion, have established themselves as cryptocurrency mainstays—while others including EOS and, more recently internet computer, have made splashy debuts only to fade away over time.

Internet computer’s ICP token is down over 90 percent from its all-time high price set shortly after its launch in May, while EOS, which made headlines when it raised $4.1 billion ahead of its launch in 2018, is trading 80 percent lower.

Ehrsam also warned against investors betting on NFTs (non-fungible tokens). The popularity of NFTs, that use cryptocurrency technology to allow all manner of digital real estate from artwork to tweets, memes and YouTube videos, to be tokenized and sold via a blockchain, has exploded over the last few months—though data suggests the market is already significantly down on its early-May peak.

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Banking Giant BBVA Opens Bitcoin Trading and Custody Service in Switzerland

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Spanish banking giant BBVA’s swiss entity, BBVA Switzerland, has started offering bitcoin trading and custody services.

Announcing the news on Friday, BBVA Switzerland said the services will be available to all of its private banking clients from Monday, June 21. The launch comes six months after the bank began trialing the services in Switzerland.

“This gradual roll-out has allowed BBVA Switzerland to test the service’s operations, strengthen security and, above all, detect that there is a significant desire among investors for crypto-assets or digital assets as a way of diversifying their portfolios, despite their volatility and high risk,” said Alfonso Gomez, CEO of BBVA Switzerland.

While the bank currently only supports bitcoin, it said the aim is to also offer other cryptocurrencies in the future. As for the launch of the services in other countries, BBVA Switzerland said that would depend on maturity, demand, and regulation in those markets.

BBVA said its bitcoin services are novel as clients can manage their investments alongside traditional assets in the same portfolio. Customers willing to convert their bitcoin into fiat and vice versa can do so “without delays and without the illiquidity that affects other digital wallets or independent brokers,” said BBVA. That’s because the bank operates with several sources for converting cryptocurrencies, it said, without disclosing those sources.

BBVA’s services come as more mega-banks open up to the crypto space. In recent weeks, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, and other financial institutions have moved to provide crypto services to their clients.

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Goldman Sachs Partners Crypto Management Firm Galaxy Digital, Offers Bitcoin Futures

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Galaxy Digital’s co-president Damien Vanderwilt announced today that his firm has partnered with Goldman Sachs to help provide bitcoin futures products. The partnership marks one of the first occasions where an American multinational investment bank has partnered with a crypto asset service provider.

Galaxy Digital is a financial services and investment management innovator founded by the company’s CEO Mike Novogratz. Vanderwilt explains that Goldman Sachs, the bank with $2.1 trillion assets under management (AUM), may entice other financial incumbents to follow its lead.

“There’s a whole dynamic with the major banks that I’ve seen time and time again: safety in numbers,” Vanderwilt explained during his discussion about the subject. “Once one bank is out there doing this, the other banks will have [fear of missing out] and they’ll get on-boarded because their clients have been asking for it.”

According to Vanderwilt, Goldman depends on Galaxy because regulatory policy stops the multinational investment bank from handling the leading crypto asset directly. Max Minton, head of digital assets for Goldman’s Asia-Pacific region said during the announcement that the bank procures clientele with the assets they demand.

“Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade,” Minton remarked. “In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.”

The statements from Minton and Vanderwilt follow the report that said Goldman was prepping to offer ether futures and options swaps. At the time, Goldman said “institutional adoption will continue” in the crypto space.

In mid-April Galaxy Digital revealed it had entered the bitcoin exchange-traded fund (ETF) fray when it submitted its Form S-1 registration with the U.S. Securities Exchange Commission (SEC).

Vanderwilt also said that when more institutional players join the crypto ecosystem volatility will grow less and less.

“You’re moving the market participants from being north of 90% retail, a huge chunk of which have access to ridiculous amounts of leverage, into an institutional community, who have proper, tried-and-tested rules and regulations about leverage, asset-liability mismatch, and risk,” Vanderwilt concluded.

“The more activity that moves into the institutional community, the less volatility there will be.

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