This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Wall Street Reluctantly Embraces Crypto
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Wall Street Reluctantly Embraces Crypto
Markets

Wall Street Reluctantly Embraces Crypto

Editorial Board Published May 1, 2022
Share
Wall Street Reluctantly Embraces Crypto
SHARE

Wall Street has a message for its many clients that have been eager to invest in cryptocurrencies: OK, OK, we hear you.

Contents
Newsletter Sign-upMarketsSHARE YOUR THOUGHTSCryptocurrency Markets

The largest U.S. banks, securities firms and custodians, many of whom once greeted the emergence of digital assets with skepticism, are now showcasing their forays into the market.

“It’s a moment in time when the traditional industry has woken up and more broadly accepted this is happening,” said Walt Lukken, president and chief executive of the Futures Industry Association, a large trade group for the derivatives markets. 

Their recent conversion, industry executives said, has less to do with any epiphany about crypto’s utility than it does a simple reality: They don’t want to lose the business to rivals.

Hedge funds and other professional investors were already trading cryptocurrencies, but many money managers—from mutual-fund giants to pension funds—are increasingly eager to find a way into the crypto markets, executives said. Inflation and rising interest rates have damped expectations for returns on stocks and bonds, making cryptocurrencies more attractive.


Newsletter Sign-up

Markets

A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data.


Now the money managers, banks’ biggest clients, want to pay them to trade and lend, structure and safeguard crypto. They are uneasy with relying on crypto startups on transactions that involve other people’s money and want mainstream financial firms to settle into their traditional roles as intermediaries. Wall Street’s participation, investors say, might bring stability to the nascent markets. 

“It’s gotten to the point where everyone is at some point in the journey,” said Mike Demissie, head of digital assets and advanced solutions at Bank of New York Mellon Corp. “If they’re not actively investing [in crypto], then they’re exploring it.” 

In response, most banks and custodians are working on plans to move forward with handling crypto—at different paces.

Firms such as Fidelity Investments and Cowen Inc. have started storing and trading cryptocurrencies, either on their own or through ventures with digital-asset startups. Last week, Fidelity announced plans to allow individual savers to add bitcoin to their 401(k)s. The U.S. Labor Department argued the offering would risk Americans’ retirement security.

BNY Mellon and rivals such as State Street Corp. are building capabilities to store and trade bitcoin and other digital assets while they await U.S. and state regulatory approvals that they say will allow them to go live with those services for institutional clients. They expect that to happen as soon as this year.

WSJ’s Dion Rabouin explains why Wall Street is now betting big on crypto and what that means for the new asset class and its future. Photo composite: Elizabeth Smelov

Investment banks, including Goldman Sachs Group Inc. , have said they also need more regulatory input before they can handle cryptocurrencies directly. In the meantime, Goldman has started executing trades on both over-the-counter bitcoin options as well as futures listed with CME Group Inc., operator of the world’s biggest derivatives exchange. The bank also recently made a loan that was secured by the borrower’s bitcoin holdings.

Regulatory uncertainty is not the only reason many mainstream financial firms have waded gingerly into the crypto world. Inside these firms, the crypto skeptics can still outnumber the crypto curious. In recent years, bitcoin has been derided as both “worthless” by Jamie Dimon, CEO of the largest U.S. bank, JPMorgan Chase & Co., and “rat-poison squared” by Berkshire Hathaway Inc. CEO Warren Buffett, perhaps Wall Street’s best-known investor.  

Some firms don’t feel compelled to lead the charge into a new market, opting instead to wait for the moment when there are enough fees to justify the risks. 

SHARE YOUR THOUGHTS

How will the embrace of bitcoin and other digital assets by Wall Street firms change the world of cryptocurrency, and vice versa? Join the conversation below.

“They all understand something revolutionary is taking place that will impact parts of their business model,” said Damien Vanderwilt, co-president of Galaxy Digital Holdings Ltd. , a firm that provides trading and advisory services to digital-asset companies and runs its own crypto investing business. “When they stop and think, `What do we do about it,’ the answer for most banks is that the opportunity today is not big enough to take the reputational risks of being early.” 

Jeffrey Solomon, Cowen’s chairman and chief executive, said institutional investors are taking the same path they did more than 50 years ago, when stocks were largely held in personal accounts and the market struggled to handle surges in trading volume. 

Advancements in computer power helped change all of that, leading to huge growth in stock-investing products managed by professionals, he said.  Big-money investors—and the banks and brokers who serve them—find themselves at a similar crossroads, he said.  

 At the Futures Industry Association’s recent annual conference, crypto was everywhere. Crypto firms sponsored the event, and their executives sat on panels. Their presence didn’t go unacknowledged by the industry’s old guard. While many attendees congregated in the lobby of the Boca Raton Resort & Club in mid-March, CME Chairman Terry Duffy approached FTX crypto exchange founder Sam Bankman-Fried for a quiet chat. “All eyes were on them,” one attendee said.

Write to Justin Baer at [email protected]

Cryptocurrency Markets

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:PAIDRSS
Share This Article
Twitter Email Copy Link Print
Previous Article Warren Buffett Says Markets Have Become a ‘Gambling Parlor’ Warren Buffett Says Markets Have Become a ‘Gambling Parlor’
Next Article Ukraine War Puts Spy Satellites for Hire in Spotlight Ukraine War Puts Spy Satellites for Hire in Spotlight

Editor's Pick

Brooke Hogan Written Out of Hulk’s Will (At Her Personal Request)

Brooke Hogan Written Out of Hulk’s Will (At Her Personal Request)

Studying Time: 3 minutes Brooke Hogan isn’t in her dad’s will, a brand new report reveals. Regardless of years of…

By Editorial Board 4 Min Read
6 Greatest Underwear To Stop Chafing For Males in 2025 | Fashion
6 Greatest Underwear To Stop Chafing For Males in 2025 | Fashion

We independently consider all really helpful services. Any services or products put…

15 Min Read
9 Finest Males’s Shorts Manufacturers – Versatile Types For 2025 | Fashion
9 Finest Males’s Shorts Manufacturers – Versatile Types For 2025 | Fashion

We independently consider all advisable services. Any services or products put ahead…

13 Min Read

Oponion

Letters: Oakland mayor race debate essential for sturdy election

Letters: Oakland mayor race debate essential for sturdy election

A debate is crucialfor sturdy mayoral raceI supported Loren Taylor…

February 7, 2025

Bhad Bhabie & Child Daddy Face Armed Intruders at Dwelling

Studying Time: 3 minutes Bhad Bhabie…

March 7, 2025

18 Greatest Colognes for Males in 2025 | Fashion

We independently consider all really helpful…

January 20, 2025

California insurance coverage disaster: Listing of carriers which have fled or lowered protection within the state

FOX Enterprise Cheryl Casone joined Fox…

January 10, 2025

Find out how to Gown Like Robert Pattinson: Type Information for a Trend Influencer | Fashion

We independently consider all beneficial services…

January 27, 2025

You Might Also Like

Tesla grants Musk large pay deal to maintain CEO on board amid authorized battle
Markets

Tesla grants Musk large pay deal to maintain CEO on board amid authorized battle

William Blair power and energy applied sciences group head Jed Dorsheimer discusses what to look out for after the Tesla…

4 Min Read
Microsoft joins unique T market cap membership after AI surge, becoming a member of just one different firm
Markets

Microsoft joins unique $4T market cap membership after AI surge, becoming a member of just one different firm

Angelo Zino, a CFRA Analysis senior fairness analyst, discusses the efficiency of Microsoft, Meta and the general tech sector within…

4 Min Read
Moderna plans to slash 10% of workforce as COVID shot gross sales gradual
Markets

Moderna plans to slash 10% of workforce as COVID shot gross sales gradual

Rep. Russell Fry, R-S.C., discusses the Home probe into Pfizer’s launch of COVID vaccine outcomes and extra on ‘Varney &…

3 Min Read
Figma goes public, and the CEO was a fellow at Peter Thiel’s basis
Markets

Figma goes public, and the CEO was a fellow at Peter Thiel’s basis

‘Making Money’ host Charles Payne discusses whether or not the inventory market is a coiled spring able to explode or…

5 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?