Crypto Friendly Banks
The banking and financial world is changing right in front of our eyes. Like many other sectors, the world has had to change due to the COVID-19 pandemic. There have never been more eyes on government and institutions than now. Although the pandemic is horrible and, I wish it were over. Luckily the world has found a new source of hope and, that’s cryptocurrencies. People realize the power of decentralized finance and the luxury of having complete control of your hard-earned money. Online crypto exchanges like Coinbase, Gemini, Bitgo, Shakepay offer options to gain exposure to Cryptocurrencies. Traditional Institutions should be shaking in their boots as they watch the money pour into Cryptocurrencies. There are only a few Crypto friendly banks right now, and it’s going to pay off big time for them and here’s why.
Banks that have already adopted a form of Crypto exchange are going to win lots of business. Unlike many millennials or Generation Z, Boomers have a more challenging time gaining exposure to Cryptocurrencies and, the bank is a more convenient option. Crypto-Friendly Banks will give exposure through exchange-traded- funds or access to the hard asset. Below I have listed institutions in North America that will have adopted Cryptocurrencies.
Crypto Friendly Banks United States
Hats off to Morgan Stanley for being the first major US institution to offer Bitcoin Funds to high net worth clients as of March 17th, 2021. Morgan Stanley earned lots of respect for taking the risk to be the first to offer Bitcoin funds and be the trendsetter for the future. Morgan Stanley provides two different Bitcoin funds for high-net-worth clients. Galaxy Digital Holdings and Bitcoin company NYDIG offer funds to Morgan Stanley with a minimum investment amount of $25,000.
Shortly after the Morgan Stanley news, the oldest bank in America, BNY Mellon, announced. “Digital Assets are the future.” BNY Mellon has 2 trillion dollars of assets under management and, having them join the crypto ecosystem would be massive. As of right now, no American ETF has got approved by the SEC. Although no ETF has been approved yet, I have a hunch BNY Mellon will be the first one out of the gate because of their long history in Wallstreet. There is a reason BNY Mellon is the oldest bank in America because they know how to adapt to change.
JPMorgan’s CEO Jamie Dimon has been quite critical about Bitcoin in the past. I’m not sure if it was an actual change of heart or FOMO, but Jp Morganchase has announced they will be offering high net worth, clients, Bitcoin funds as early as this summer. JPMorgan is one of the biggest banks in America with 3.2 trillion assets under management. I’m thrilled they are getting involved in the crypto ecosystem, but I have spoken about Jamie Dimon to great lengths in the past, and I recommend being careful with him.
Just yesterday, May 19th Wells Fargo announced it would introduce managed digital currencies funds for its high net worth clients. This announcement could not be any more bullish for Bitcoin, especially because we are just coming off the biggest correction Bitcoin has had in 4 years! Wells also mentioned, “WFII believes that crypto-currencies have gained stability and viability as assets, but the risks lead us to favour investment exposure only for qualified investors, and even then through professionally managed funds.” It’s only a matter of time before every bank in the United States offers crypto funds.
Crypto Friendly Banks Canada
Although Canada has led the world in adopting exchange-traded funds, not one of the major institutions in Canada has announced they would be offering digital funds for clients as of yet. It is only a matter of time before realizing how much money they are missing out on. The US banks are ahead of the curve on offering digital funds. At least one Canadian Financial institution is capitalizing on this opportunity, and they are truly going to win big.
Wealthsimple has become extremely popular in Canada for do-it-yourself investors. Because they offer no account fees and $0 commissions, as of September 22nd, WealthSimple announced all users can now buy Bitcoin or Ethererum instantly with no account minimums, pricing transparency, and no fees to deposit or withdraw. All coins are held with Gemini Trust Company, one of the world’s biggest crypto exchanges. Wealthsimple is ahead of the pack in Canada with Crypto adoption, and, I think, offering no account minimums is a massive opportunity.
Millennials Will Be The Richest Generation
Another reason banks need to pivot quickly is Millennials, and Generation Z is the main contributor to the crypto ecosystem. Forbes came out with a study mentioning by the year 2030 that Millennials worldwide will inherit 68 trillion dollars from their baby boomer parents. This will be the most significant wealth transfer in modern times. Banks should be thinking about this because do you think millennials will be investing their money in a traditional index or mutual fund? Of course not it will be going right into cryptocurrencies. Ten years from now, if inflation continues, Crypto will be the ultimate hedge and investment for anyone going forward. Najib Razak, the former prime minister of Malaysia, once said, “The world is changing quickly, and we must be ready to change with it or risk being l
eft behind,” not specific to Crypto, but the same statement applies!
Bitcoin adoption is still in the early innings. The banks in the US are doing a fantastic job accepting and using digital currencies as an option for their high net worth clients, and this only appears to be the beginning. Canadian banks need to pick up the slack. Or they will not be around in 10 years. Institutions need to realize they have significant competition. My theory is that crypto exchange companies like Bitgo, Shakepay, Coinbase, and Gemini will replace traditional institutions and be known as world banks. Gemini came out with a report mentioning since the start of 2021. They are averaging 50k new signups weekly. Banks will begin to notice their assets under management fall while crypto exchange companies grow.