Big financial firms across Wall Street and worldwide are planning to add cryptocurrency assets to their portfolios, with up to 20 percent of firms forecasted to add crypto assets in 2018.
Thomson Reuters conducted a study of over 400 of their financial industry clients, including unidentified “large asset managers, hedge funds and trading desks at the biggest banks,” and found that one in five are considering trading cryptocurrency in the next 12 months. Of those interested in offering crypto trading, 70 percent, or at least 56 firms, plan to do so in the next 3 to 6 months.
Institutional involvement in the crypto space continues to grow, and, according to Reuters, “has been predicted to grow, despite regulatory warnings that cryptocurrencies are highly risky and prone to scams.”
Several large banks have already rolled out cryptocurrency trading operations, including Swissquote and Bank Frick, while names like Goldman Sachs and Morgan Stanley are clearing Bitcoin futures contracts for select institutional clients.
However, steep drops in the trading prices of cryptocurrencies across the board since January have encouraged many potential institutional players to ‘remain on the sidelines’ and wait to see whether the crypto space was indeed a bubble or if it will bounce back.
Optimism is growing in April, as many cryptocurrency assets have rallied in price. Bitcoin climbed from just over $6800 on April 1 to over $9300 on April 24, Ethereum has risen from about $380 to nearly $700, and Bitcoin Cash has more than doubled in the same time period, growing from about $640 to over $1500.
The capitalization of the cryptocurrency market, which had once been as high as $800 billion, crashed to under $300 billion, but has since rallied to over $400 billion, drawing increased interest from institutional players and their clients.