- A large number of financial players continue to move into the crypto space.
- Its volatility may be holding it back from reaching its potential value.
- The future of crypto seems uncertain as both community interest and risks stay high.
Even as the pressure around entering the crypto space has cooled down, a large number of big players continue to move in. Many US finance giants are treading forward, cautiously.
Jamie Dimon, Chief Executive at JPMorgan and Chase, said recently,
“My own personal advice to people: Stay away from it.” He added, however, “That does not mean the clients don’t want it.”
The biggest US bank in terms of assets, JPMorgan is currently assessing how it can help its clients transact in crypto.
Early 2021 saw the financial industry brimming with excitement and possibilities for cryptocurrency. Part of this was due to Bitcoin’s unprecedented jump in value from late 2020 to early 2021. Some of the most recent players attracted by crypto’s novelty are:
- Online trading firm Interactive Brokers, who promised that it will establish online trading of crypto on its platform by summer end. At this moment, it doesn’t offer crypto payments. Still, it gives its clients the option to invest in assets that include crypto or Bitcoin futures.
- ForUsAll, a platform managing retirement accounts for small businesses, has also stepped in. It announced on Monday its decision to work with Coinbase for clients to invest up to 5 percent of their balances in crypto.
- Morgan Stanley, Goldman Sachs, have both recently targeted crypto enthusiasts within their clients. The former stated that it would allow its richer clients to invest in Bitcoin funds, while the latter opened its doors to crypto trading with a newly assigned team.
- Brokerage firm Fidelity Investments also filed papers with US securities regulators for a Bitcoin exchange-traded fund (ETF). Previously, it created a digital assets division in 2018 to trade crypto for hedge funds.
Despite the steady, yet cautious increase in digital asset investors, concerns remain high. This has also to do with high volatility in the market, especially reflected in Bitcoin’s most recent bull run. BTC went from $63,000 in mid-April 2021 to half its value, $34,000 in June.
Ian Gendler from Value Line, a research firm, sheds light on the influx of investors saying, “Speculators and those suffering from FOMO (the ‘fear of missing out’) will surely continue to flock to cryptos in the hopes of achieving huge returns.”
He, however, directs clients to avoid crypto investments due to high risks and the lack of tangible assets. He also noted, Bitcoin and other digital money is not backed by governments.
Cryptocurrencies are only worth what the next investor is willing to pay.
It seems likely that crypto’s lack of a steady trend may be holding the currency back and blocking possible investments. Be that as it may, but investor interest in the digital asset is far from going down. We’ll just have to keep waiting to see what the future holds for cryptocurrency.