AP

As Bitcoin goes mainstream, Wall Street looks to cash in

NEW YORK (AP) — Love cryptocurrencies or hate the very idea of them, they’re becoming more mainstream by the day.

Cryptocurrencies have surged so much that their total value has reached nearly $2.5 trillion, rivaling the size of G7 economies like Canada’s and Italy’s, with more than 200 million users. At that size, it’s simply too big for the financial establishment to ignore.

Firms that cater to the world's wealthiest families are increasingly putting some of their fortunes into crypto. Hedge funds are trading Bitcoin, which has big-name banks starting to offer them services around it. PayPal lets users buy crypto on its app, while Twitter helps people show appreciation for tweets by tipping their creators with Bitcoin.

And in the latest milestone for the industry, an easy-to-trade fund tied to Bitcoin began trading on Tuesday. Investors can buy the exchange-traded fund from ProShares through an old-school brokerage account, without having to learn what a hot or cold wallet is.

It's all part of a movement across big businesses that see a chance to profit on the fervor around the world of crypto, as a new ecosystem further builds up around it, whether they believe in it or not.

“The one thing you can say for certain is that the advent of the era of the Bitcoin ETF opens up the opportunity for Wall Street to make money on Bitcoin in a way that it hadn’t been able to previously,” said Ben Johnson, director of global ETF research at Morningstar. “The winners in all of this are the exchanges and the asset managers and the custodians. Whether investors win or not is a big, bold question mark.”

Bitcoin has come a long way since someone or a group of someones under the name Satoshi Nakamoto wrote a paper in 2008 about how to harness computing power around the world to create a digital currency that can’t be double-spent. The price has more than doubled this year alone to roughly $62,000. It was at only $635 five years ago.

Supporters of cryptocurrencies say they offer an ultra-important benefit for any investor: something whose price moves independently of the economy, rather than tracking it like so many other investments do. More high-minded fans say digital assets are simply the future of finance, allowing transactions to sidestep middlemen and fees with a currency that’s not beholden to any government.

Critics, meanwhile, question whether crypto is just a fad, say it uses too much energy and point to all the stiff regulatory scrutiny shining on it. China last month declared Bitcoin transactions illegal, for example. The chair of the U.S. Securities and Exchange Commission, Gary Gensler, said in August that the world of crypto doesn’t have enough investor protection and “it’s more like the Wild West.”

That hasn't been enough to halt the immense momentum for crypto, as it's gone from an online curiosity to a bigger part of the cultural and corporate landscape.

U.S. Bank earlier this month said it has begun offering a cryptocurrency custody service for big investment managers. That means it essentially holds their Bitcoin in safekeeping for them, and it expects to offer support for other coins soon.

Other name-brand banks have also announced intentions to offer custodial services for crypto.

“It’s not just in the fringes and dark corners of the Web that it’s happening,” said Kashif Ahmed, president of American Private Wealth in Bedford, Massachusetts.

Ahmed doesn’t recommend his clients invest in crypto. Before then, he said he’ll need to be able to “go to my local supermarket and buy things for my family and offer crypto and not be laughed out of the store.”

But others are more willing to try it.

In a survey by Citi Private Bank of family offices around the world that manage money for wealthy people, roughly 23% said they have made some investments in crypto. Another 25% said they are researching it.

The growing acceptance of crypto on Wall Street has created a new crop of darlings that help people buy it. Crypto trading platform Coinbase has a market value of roughly $64 billion, for example, putting it on par with such established companies as Colgate-Palmolive, FedEx and Ford Motor.

At Robinhood Markets, meanwhile, the company that became famous for getting a new generation of investors into the stock market is increasingly becoming a place for crypto trading. This spring was the first time when new Robinhood customers were more likely to make their first trade in cryptocurrencies rather than in stocks.

In the end, what many on Wall Street see lasting may not be as much Bitcoin and other cryptocurrencies as the technology that underlies them.

Called the blockchain, it allows for a public ledger that everyone can check and trust, and many expect it to lead to a wealth of innovations. It's akin to today's Netflix, Facebook and other services that sprung out of the infrastructure built during the boom and bust of the dot-com bubble.

“The applications built on this new software architecture appear to be growing more quickly than past technologies,” Bank of America strategists Alkesh Shah and Andrew Moss wrote in a recent research report positing digital assets are only in their first inning of growth. “New companies are likely to emerge and poorly positioned companies will exit, creating significant upside potential for some and downside for others.”

JPMorgan Chase, for example, is already using blockchain technology to improve fund transfers between global banks. That’s the same JPMorgan Chase run by CEO Jamie Dimon, who said in an interview with Axios this month that bitcoin has “got no intrinsic value.”

Read more

We're always interested in hearing about news in our community. Let us know what's going on!

AP
  • Updated

LONDON (AP) — The United Kingdom announced plans Tuesday to stop installing home heating that uses fossil fuels by 2035 as the government hosted a meeting aimed at attracting billions of dollars in foreign investment for green projects in Britain.

AP
  • Updated

LONDON (AP) — Wall Street giant BlackRock announced Tuesday that it is backing a new London-based research hub which will provide asset managers with information on how the companies they invest in are addressing risks from climate change.

AP
  • Updated

LONDON (AP) — The killing of British lawmaker David Amess is once again fueling concern about a government program aimed at preventing at-risk young people from becoming radicalized, with critics saying change is urgently needed to ensure it works.

AP
  • Updated

BRUSSELS (AP) — The European Union's top official locked horns Tuesday with Poland's prime minister, arguing that a recent ruling from the country's constitutional court challenging the supremacy of EU laws is a threat to the bloc's foundations and won't be left unanswered.

AP
  • Updated

PHENIX CITY, Ala. (AP) — Sometimes when she’s feeding her infant daughter, Amanda Harrison is overcome with emotion and has to wipe away tears of gratitude. She is lucky to be here, holding her baby.

AP
  • Updated

LISBON, Portugal (AP) — Portugal paid official homage Tuesday to Aristides de Sousa Mendes, a Portuguese diplomat who during World War II helped save thousands of people from Nazi persecution, by placing a tomb with his name in the country’s National Pantheon.

AP

MADRID (AP) — A Spanish court has shelved a lawsuit against American treasure hunters that accused them of having destroyed an underwater archaeological site when they looted a sunken galleon for tons of precious coins over a decade ago.

AP
  • Updated

LUCKNOW, India (AP) — At least 22 people have died and others are missing in floods triggered by heavy rains in the northern Indian state of Uttarakhand, officials said Tuesday.

  • Updated

South Dakota lawmakers have summoned two people who were present at a meeting Gov. Kristi Noem held last year that included her daughter, Kassidy Peters, and state employees who were overseeing Peters’ application for a real estate appraiser license. The Legislature’s Government Operations a…

AP
  • Updated

PORTLAND, Ore. (AP) — It was nearly last call on a Friday when Jacob Eli Knight Vasquez went to get a drink across the street from the tavern where he worked in northwest Portland — an area with a thriving dining scene, where citygoers enjoy laid-back eateries, international cuisines and co…

AP
  • Updated

THESSALONIKI, Greece (AP) — A vehicle carrying 10 migrants hoping to head from Greece north into the Balkans crashed in northern Greece overnight, leaving one person dead and nine injured, including one seriously, police said Tuesday.

AP
  • Updated

PORT-AU-PRINCE, Haiti (AP) — A gang that kidnapped 17 members of a U,S.-based missionary group has demanded a $17 million ransom for them, according to Haiti's justice minister, as quoted by the Wall Street Journal.

AP
  • Updated

CHAPEL HILL, N.C. (AP) — A federal judge has ruled that North Carolina’s flagship public university may continue to consider race as a factor in its undergraduate admissions, ruling against a group that argued the practice disadvantaged white and Asian students.

AP

VALLETTA, Malta (AP) — The Maltese government on Tuesday responded to a critical European human rights evaluation by vowing to soon propose new legislation to better protect journalists in the wake of the 2017 assassination of investigative reporter Daphne Caruana Galizia.

AP
  • Updated

DUBAI, United Arab Emirates (AP) — The Middle East is expected to see significant economic growth this year, but also soaring inflation and food prices, as coronavirus vaccines are unevenly rolled out across the region, the International Monetary Fund said Tuesday.

AP

LONDON (AP) — Regulators are stepping up scrutiny of the United Kingdom's music streaming market to see whether there is enough competition after lawmakers outlined concerns that major online platforms like Spotify may be too dominant.

AP
  • Updated

LOS ANGELES (AP) — The Grammys will stick to its word with the public release of the full inclusion rider to ensure equity and inclusion in hiring on all levels of production for next year’s ceremony.

AP
  • Updated

DETROIT (AP) — As an American leader, Colin Powell’s credentials were impeccable: He was chairman of the Joint Chiefs and secretary of state. But his legacy as the first Black person in those roles is murkier, with some African Americans saying that his voice on their behalf could have been louder.

AP
  • Updated

THE HAGUE, Netherlands (AP) — Dutch authorities placed an Eritrean on the Netherlands' most-wanted list Tuesday, as they seek to prosecute him for his alleged involvement in large-scale human trafficking, abuse of migrants trying to reach Europe and extortion.

AP
  • Updated

TOKYO (AP) — Japan's new prime minister interrupted his first day of election campaigning on Tuesday, as he returned to the capital of Tokyo to deal with rising regional tensions following North Korea's test-firing of a missile earlier in the day.

AP
  • Updated

BAMAKO, Mali (AP) — Mali’s government has asked the country's Islamic High Council to begin a dialogue with al-Qaida-linked groups in a new effort to address a nearly decade-long insecurity crisis.

AP
  • Updated

MOSCOW (AP) — Russia registered another daily record of coronavirus deaths Tuesday as rapidly surging infection rates raised pressure on the country’s health care system and prompted the government to suggest declaring a nonworking week.

AP
  • Updated

BANGKOK (AP) — Crowds gathered Tuesday outside prisons around Myanmar, waiting for at least a glimpse of friends and relatives who were being freed under an amnesty for people arrested for protesting against military rule.

AP
  • Updated

NEW YORK, N.Y., Oct. 19, 2021 (SEND2PRESS NEWSWIRE) — According to New York City’s Mayoral candidate, Cleopatra Fitzgerald, “National and international security are indispensable for the safety of citizens, tourists, immigrants and residents,” and she’s bringing some injustices to light. She…

AP
  • Updated

ANKARA, Turkey (AP) — Turkey's Foreign Ministry on Tuesday summoned the ambassadors of the United States and nine other countries to protest a statement they issued that called for the release of imprisoned philanthropist and civil rights activist Osman Kavala in line with a European Court o…

AP
  • Updated

AUSTIN, Texas, Oct. 19, 2021 (SEND2PRESS NEWSWIRE) — Capitol Fence, electric gates in Austin installers, shares the top reasons to install automatic gates at homes and residences. Electric gates can provide homeowners and businesses with security and safety. Electric gates are the perfect so…

AP
  • Updated

SYOSSET, N.Y., Oct. 19, 2021 (SEND2PRESS NEWSWIRE) — Fluid Metering, a pioneer in design and manufacturing of high precision fluid control solutions, is pleased to announce a new distribution agreement with OINA VV AB, now part of the THOMAS brand of OEM pumps and compressors.

Newsletters