March 30, 2023
By Anjali Kochhar
Only recently, the Securities and Exchange Commission (SEC) added Coinbase, a notable crypto exchange platform, to their “crypto crackdown list”. Even then, Bitcoin maintained a stable position on the market, gaining 1.16 per cent, to reach USD 27,832.
Within the span of 11 days, three major investment banks based in the US lost their wings, mainly Silicon Valley Bank, Signature Bank, and Silvergate. Unexpectedly following suit was the collapse of a major Switzerland–based bank, Credit Suisse. Fortunately, it has now been acquired by the Union Bank of Switzerland (UBS).
In a nutshell, it has been a rocky road for global investment banks. And the downfall is not yet over.
Curiously enough, leading cryptocurrencies have been consistently performing despite authorities continuing their crackdown.
Bitcoin remains stable despite SEC crackdown
Only recently, the Securities and Exchange Commission (SEC) added Coinbase, a notable crypto exchange platform, to their “crypto crackdown list”.
Even then, Bitcoin maintained a stable position on the market, gaining 1.16 per cent, to reach USD 27,832. The asset’s volume gained 10.14 per cent in the past 24 hours to reach USD 14.36 billion, as on March 27, 2023.
Even the global cryptocurrency market was trading at a higher level of USD 1.16 trillion, marking a 0.68 per cent rise in the past 24 hours.
Clearly, amid an ongoing banking crisis, cryptocurrency seems to be a safe haven for global investors.
But, let’s look at whether investment banks share the same sentiment.
Investing in Blockchain and Crypto
A recent report by Analytics Insight describes how leading investment banks in the world have actively invested in blockchain and cryptocurrency. In spite of regulatory authorities announcing sanctions and crackdowns against crypto exchanges.
As per the Analytics Insight report, Standard Chartered has till now, invested a whopping USD 380 million in cryptocurrencies. This corroborates with the data provided by Blockdata, a leading market intelligence platform.
Blockdata also suggests that the London-based investment bank also has stakes in crypto and blockchain-based platforms including –
- METACO: USD 17 million approx
- Carbonplace: USD 45 million
- Contour: funding amount undisclosed
With USD 234 million committed towards cryptocurrencies, Morgan Stanley becomes another global investment bank to penetrate the blockchain and crypto universe.
Along with cryptocurrency, the bank has also funded companies in the blockchain space including –
- Securitize: USD 73 million approx.
- R3: USD 2 million
Based in Japan, Citigroup was far ahead of its time when in 2015, began experimenting with a test platform for digital currencies. Eventually, the plan was to introduce their very-own cryptocurrency, Citicoin.
If this seems like old news, the Japan-based investment bank has been actively developing its in-house digital assets team. Only last year, it hired Ryan Rugg and David Cunningham Citigroup’s Treasury and Trade Solutions unit, thus deepening its claws into cryptocurrency.
Additionally, JPMorgan Chase & Co. and Goldman Sachs have also made stints in the cryptocurrency and blockchain space. The former introduced JPM Coin, its own dedicated cryptocurrency to enable rapid payments with their clients.
The latter in 2018, opened a separate trading desk dedicated for cryptocurrency investments. Three years later, in 2021, it widened its portfolio by including Bitcoin futures.
What lies ahead…
Indeed, amid the ongoing banking crisis, digital assets such as cryptocurrencies become a safety net for investors to store their capital, without falling victim to bank collapse.
Having said that, this safety net may not be sustainable, with regulatory authorities imposing newer restrictions on digital assets.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.