Bitcoin Gains Unexpected Allies As Financial Giants Turn From Skeptics To Supporters

Bitcoin BTC/USD, the world's largest digital currency with a market cap of more than $592 billion, has seen a remarkable rise in popularity and value among financial institutions.

According to crypto purchasing platform Swan Bitcoin, institutional investors have been feeling the FOMO, or "fear of missing out," on Bitcoin’s growth and have been increasing their exposure to the cryptocurrency.

What Happened: A number of traditional financial entities have reversed their previous cautious stance on Bitcoin, signaling a change in their approach to cryptocurrency.

Here's a comparison, compiled by Swan Bitcoin Analyst Sam Callahan, of how BlackRock BLK, Deutsche Bank DB, Santander Bank SAN and others had a change of heart:

BlackRock, with $9 trillion assets under management (AUM), previously expressed doubts about cryptocurrency. Last year, it formed a partnership with Coinbase Prime to offer its clients crypto trading and custody services.

It also launched a Bitcoin trust for its private clients.

Deutsche Bank, with $1.4 trillion AUM, is now exploring the possibility of offering a secure storage solution for digital assets.

The bank, which previously cautioned against investing in Bitcoin, has applied for a digital asset license from German regulator BaFin to operate as a crypto custodian.

Santander Bank, with $1.7 trillion AUM, previously terminated client accounts for Bitcoin trading. It has since changed its stance, and received registration from France’s Financial Markets Authority (AMF) as a crypto custodian.

Also Read: Binance Survey Touts Crypto Confidence Among VIP Users, 88% Expect Bright Future

Citadel Securities, with $62 billion AUM, previously dismissed Bitcoin but ended up joining forces with Charles Schwab Corp SCHW and Fidelity to establish a new exchange called EDX Markets.

Societe Generale, with $1.5 trillion AUM, once doubted Bitcoin's future, but has now secured registration to become a crypto custodian.

This comes after receiving licensing approval from France’s Financial Markets Authority (AMF), marking a significant shift from its previous skepticism towards Bitcoin.

The total AUM of these traditional financial institutions is a staggering $24.9 trillion.

Given Bitcoin's current market cap, the potential influence of institutional demand for Bitcoin could be substantial.

However, Callahan cautions that while approving a Bitcoin ETF would be a positive development for Bitcoin's price, it does not equate to owning actual Bitcoin.

Investors would be purchasing a paper IOU that represents the underlying Bitcoin, with all the associated counterparty risk.

Why It Matters: This shift in attitude comes against the backdrop of regulatory actions against crypto-centric firms such as Coinbase COIN and Binance BNB/USD.

Despite initial fears of a significant drop in Bitcoin's value, the cryptocurrency has demonstrated resilience, with its price increasing by nearly 15% over the past two weeks.

Callahan further notes that while these financial giants may be latecomers to the Bitcoin scene, their participation marks a significant shift in the financial landscape. It underscores Bitcoin's durability and its potential for continued growth in the future.

Read Next: US Investors Fuel Bitcoin's Meteoric Rise Amid Institutional Buying Frenzy

Join Benzinga's Future of Crypto in NYC on Nov. 14, 2023 to stay updated on trends like AI, regulations, SEC actions & institutional adoption in the crypto space. Secure early bird discounted tickets now!