Global Financial Institutions may enter into Cryptocurrency Trading
With the market cap of cryptocurrency crossing the $100 billion benchmark, finance’s old guards cannot turn cold shoulder to digital currency options like Bitcoin anymore.
Last week CBOE Holdings announced its plans of debuting with Bitcoin Futures. Goldman Sachs has also recently outlined the Bitcoin investing basics to be adhered to by its clients. Fidelity Investments announced their partnership with premier Cryptocurrency Exchange Coinbase on Wednesday under a test project which will help customers view the digital cash held by them in the said exchange.
In a blog post Coinbase revealed that this latest collaboration reveals the increasing commitment of orthodox financial bodies towards adoption of digital assets and widening customer accessibility. However it will take time before the largest financial bodies show a green signal to its clients for trading cryptocurrencies like Bitcoin.
Observers feel that in spite of big investors entering the Bitcoin arena, global regulations are still inconsistent. Access to Bitcoin Exchange is determined by the investor’s geographical location. License requirements and regulatory requirements vary from country to country. Goldman Sachs has pointed out in their report that the cryptocurrency market is subject to major price swings and is still relatively small.
However investors trying to get bigger orders can make use of block trading for the same. According to Hadley Stern, the managing director and senior vice president at research and development wing of Fidelity Labs, the ledger technology underlying bitcoin transactions are still at its nascent stage and it will take considerable amount of time before the same receives mass acceptability.
According to Coinbase, in the last six months horizon, proprietary trading firms and financial firms dealing in hedge funds have started trading in Ethereum and Bitcoin. Some are exploring market possibilities whereas others have already started testing strategies. Big US financial institution would also start showing increasing interest in the digital currency arena as its liquidity increases with time. Switzerland’s Falcon Private Bank has received a thumbs up from its regulators allowing buying, selling and holding of Bitcoins by clients through bank. The bank will be functioning in association with bitcoin Suisse to provide the said service to its clients.
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