According to crypto purchasing platform Swan Bitcoin, institutional investors have been feeling the FOMO, or “fear of missing out,” on Bitcoin’s growth and have been increasing their exposure to the cryptocurrency.
What Happened: A number of traditional financial entities have reversed their previous cautious stance on Bitcoin, signaling a change in their approach to cryptocurrency.
It also launched a Bitcoin trust for its private clients.
Deutsche Bank, with $1.4 trillion AUM, is now exploring the possibility of offering a secure storage solution for digital assets.
The bank, which previously cautioned against investing in Bitcoin, has applied for a digital asset license from German regulator BaFin to operate as a crypto custodian.
Santander Bank, with $1.7 trillion AUM, previously terminated client accounts for Bitcoin trading. It has since changed its stance, and received registration from France’s Financial Markets Authority (AMF) as a crypto custodian.
Societe Generale, with $1.5 trillion AUM, once doubted Bitcoin’s future, but has now secured registration to become a crypto custodian.
This comes after receiving licensing approval from France’s Financial Markets Authority (AMF), marking a significant shift from its previous skepticism towards Bitcoin.
The total AUM of these traditional financial institutions is a staggering $24.9 trillion.
Given Bitcoin’s current market cap, the potential influence of institutional demand for Bitcoin could be substantial.
However, Callahan cautions that while approving a Bitcoin ETF would be a positive development for Bitcoin’s price, it does not equate to owning actual Bitcoin.
Investors would be purchasing a paper IOU that represents the underlying Bitcoin, with all the associated counterparty risk.
Despite initial fears of a significant drop in Bitcoin’s value, the cryptocurrency has demonstrated resilience, with its price increasing by nearly 15% over the past two weeks.
Callahan further notes that while these financial giants may be latecomers to the Bitcoin scene, their participation marks a significant shift in the financial landscape. It underscores Bitcoin’s durability and its potential for continued growth in the future.
Produced in association with Benzinga