FILE – In this April 4, 2017 file photo, Jamie Dimon, Chairman and CEO of JPMorgan Chase, discusses …
If New York-based venture capital firm Pantera Capital’s bitcoin forecast of $110,000 by the end of this year proves as accurate as past forecasts then that bank investment could soon rise to more than $70 billion.
Even so, there’s little doubt that JPMorgan has the means to acquire a large name in the crypto world if and when it sees strategic value in doing so.
The announcement last week that Boston-based custodian giant State Street is building the trading technology behind Pure Digital, a new multi-dealer trading platform, is a subtle but important cue that an unknown number of banks are finally taking one of the necessary steps to operate in crypto markets at scale.
The simple reason banks might want such a platform is that they live in a hyper-regulated world where the usual palatable way to invest in something new is to share the risk with other banks.
The difference for this low bank participation in crypto futures is that asset managers – think pension funds – consume large quantities of euro-dollar futures but they don’t consume crypto derivatives the same way.
Banks don’t earn as much transactional revenue by trading at the CME as they do by trading with clients directly over-the-counter .
One of the reasons why banks have survived as long as they have is because they adapt.
Prior to my analyst days, I was head of sales for Interbank FX, a fast-growing brokerage firm that was ranked #46 in 2008 by INC magazine.