Bitcoin

BNY Mellon’s entry into the cryptocurrency sector is intended to close the generation gap

As the naysayers continue to want the so-called “Bitcoin bubble” to burst, the market’s highest cryptocurrency is apparently rising to a new level every day. For example, In the same week that Tesla announced its entry into the cryptocurrency market, Bitcoin (BTC) surged nearly $ 10,000.

And although the market later faced a correction, As soon as the news broke that BNY Mellon, the oldest private bank in the US, entered the cryptocurrency market, the situation improved and the largest digital currency by total market capitalization rose again.

In that sense, the banking giant is with $ 2.2 trillion in assets under management and $ 41.1 trillion in assets under management and / or under managementannounced its decision to hold, transfer, and issue Bitcoin and other cryptocurrencies as an asset manager on behalf of its clients, potentially exposing this asset class to a whole new investor sector.

BNY Mellon’s entry into the cryptocurrency sector is intended to close the generation gap
BNY Mellon’s entry into the cryptocurrency sector is intended to close the generation gap

Another reason for the current momentum could be payments giant Mastercard’s announcement that it will allow its user base to use crypto assets with its 30 million merchants. Additionally, on February 11, PayPal announced its plans to expand its recently launched cryptocurrency offering to the UK market. In addition, the company’s mobile services subsidiary Venmo announced that it plans to deliver digital asset services to its 29 million users in the coming months.

What does BNY Mellon’s entry mean?

According to reports, BNY Mellon intends to manage cryptocurrencies using a platform that is currently in the prototype phase. In this regard It has also been reported that the system can also manage a wide range of traditional holdings such as government bonds and stocks.

It also appears that the financial institution has not specified which crypto-assets it will provide its custody services for. What’s more BNY Mellon has already deployed a team of executives led by Michael Demissie to drive the integration of custody and management of cryptocurrencies into the bank’s existing suite of products.

This is what Hank Holland, founder and managing partner of the private equity firm Pegasus Growth Capital and former managing director of Merrill Lynch, said in an interview with Cointelegraph As an established and trusted private bank and one of the largest custodians for registered investment advisors, BNY’s commitment to digital asset custody is a necessary and predictable step toward greater investor acceptance and acceptance of BTC and other crypto assets::

“The strategic initiative addresses two major hurdles. First, BNY’s escrow solution provides a familiar” on-ramp “to owning BTC for the average investor who does not want to manage a private key. Second, a financial advisor recommends an allocation to Bei BTC and digital assets, the investment must be on their platform. That way, they can have an advisory commission. “

The first commitment for most BNY clients, according to Holland, will be to buy BTC to incorporate the asset into their overall strategic allocation outlook. Yet, Initial customer purchases can be followed by further investments in an actively managed portfolio of various digital assets as well as loan / acquisition strategies to complement your regular revenue streams.

Similarly, Marcos Benítez Rubianes, director of customer relations for Gazprombank, told Cointelegraph The news confirms the growing general acceptance of the traditional financial system of Bitcoin, the oldest and most liquid crypto assetand added:

“We have seen a cascading effect since PayPal announced the integration of cryptocurrency trading on its platform. Now in 2021 you have one of the most valuable companies in the world, Tesla, which is acquiring BTC for its balance sheet and, on the other hand, the oldest bank in America, which offers Bitcoin services to its customers. “

Additionally, Rubianes is confident that more traditional gamers will be using Bitcoin as an asset, perhaps even a means of payment, in the near future. especially since their customers feel the need to keep up and pressure these institutions to put them at greater risk for cryptocurrencies.

Can a Bitcoin surge be foreseen?

Now that Bitcoin hits the $ 50,000 threshold, it pays to consider whether a rally is on the horizon. On the matter, Antoni Trenchev, co-founder and managing partner of Nexo – a cryptocurrency exchange and credit service – told Cointelegraph It’s one thing for a tech company like Tesla to adopt BTC, but if America’s oldest lender does so, it’s a whole new game.and added: “Generation struggles are always fascinating to watch. Banks that follow suit, and many inevitably will, will simply come in second“.

Rubianes believes another wave could follow as more finance owners take the move towards crypto integration. If that happens I think the interest in space could be multiplied by ten. “”Those in the crypto space clearly understand that, ironically enough, one of the major obstacles to the adoption of cryptocurrencies has been self-custody.“he added.

Not everyone shares this story, however. Alexander Suhobokov, Head of Fintech at the Swiss bank Dukascopy, told Cointelegraph While a gradual integration of the cryptocurrency and traditional finance industries is in progress, and banks that fail to keep up with the times for the next year or two are at real risk of losing their competitive edge, news is highly unlikely to have a huge impact on BTC::

“There is a much better chance the value of BTC will come under heavy pressure due to the outside decisions of regulators on USDT. Hopefully these potential disruptions will not hurt the potential of cryptocurrencies.”

So what can you expect from Bitcoin?

Following BNY, Mastercard and PayPal engagements in exploring the cryptocurrency landscape in more detail in the near future, Twitter – Jack Dorsey’s company, the man behind financial services company Square – recently confirmed that it is considering offering its employees the option of receiving their salaries in Bitcoin.

In addition, the social media giant’s CFO, Ned Segal, stated that the company is looking into the possibility of including BTC on its current balance sheets. Yet, He believes a lot will depend on having a sufficient number of people interested in doing BTC with the tech company.

Finally, Daniel Pinto, co-chairman of the large US investment bank JPMorgan Chase, stated in a recent interview that the company must also be involved in Bitcoin at some point: “The demand is not there yet, but I am sure that it will eventually be“he added.

Overall, confidence appears to be growing in BTC’s chances of breaking the $ 50,000 psychological barrier. especially as the major cryptocurrency continues to successfully avoid the declining momentum that has brought the value of the digital asset to a low of USD 46,110 in the past few hours.

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