Is Wall Street Changing its Mind About Crypto?

For years, the major financial players at Wall Street approached digital currencies like Bitcoin with caution and skepticism.This stance seems to be changing, though. Many traditional finance firms in America are finally dipping their toes in crypto waters, with recent developments like Bitcoin ETFs and crypto trading platforms backed by Wall Street’s big names.

The growing interest from TradFi firms in the crypto market is positive news for the industry and could influence Bitcoin price projections for the remainder of 2024, as discussed on Binance, Yahoo Finance and Forbes..

With the launch of crypto exchanges and Bitcoin ETFs by companies like Fidelity Investments and BlackRock, institutional investors and baby boomers who had been wary of the volatile nature of cryptocurrencies now have a relatively safer means to invest in digital currencies.

This means more money for the market and a resultant surge in the value of assets like BTC. We dive into Wall Street’s interest shift in crypto and what it means for the industry in this article.

EDX Markets – A Wall Street-backed Crypto Exchange

Crypto exchanges abound in the industry, with millions of investors relying on these platforms to trade digital currencies. However, recent events with companies like FTX have seen questions raised around exchange platforms.

Many traditional investors have interest in cryptocurrencies, but they’re wary of potential risks associated with crypto exchanges (such as fund misappropriation).

To remedy these concerns and provide a safer and more compliant access into the market, Fidelity Investments, Charles Schwab, Citadel Securities,and other notable Wall Street firms developed EDX Markets (EDXM) – a non-custodial crypto exchange.

Unlike most crypto exchanges that retain custody of digital assets on behalf of investors, EDXM uses middle-men like banks to store cryptocurrencies. Utilizing third-party financial institutions as custodians of digital assets is more in line with regulatory demands and enhances transparency and customer trust.

For older investors like baby boomers who are risk-averse, this platform offers a reliable entry point into the complex crypto scene.

The fact that EDXM is the brainchild of leading Wall Street firms is an interesting development, as it sees TradFi merge with the crypto market after years of skepticism.

In all fairness, Wall Street is simply responding to the demands of traditional investors, who want to understand the crypto market and tap into what could potentially be the future of money but with a safer, more compliant strategy.

Bitcoin ETFs – A Trustworthy and Regulated Investment Instrument

Bitcoin operates on a decentralized network. While this feature is one of the appeals of the digital currency, it comes with some drawbacks for risk-averse investors.

For instance, decentralization means Bitcoin isn’t controlled by a central authority – like a central bank or any other government authority. As such, regulating the currency is a significant challenge.

It also doesn’t help that the blockchain technology at the heart of Bitcoin might be complex to understand for older individuals like baby boomers. These factors fuel the reluctance of many investors to adopt the digital coin and other cryptocurrencies.

However, that was before 2024 and the launch of Bitcoin ETFs by Wall Street giants like BlackRock. Bitcoin ETFs entered the investment market after the Securities and Exchange Commission (SEC) gave the approval in January.

The SEC approved eleven spot ETFs, but the most well-known is iShares Bitcoin Trust (IBIT) from BlackRock – the largest asset manager on the globe.

What Does Bitcoin ETFs Mean for Investors?

Prior to the approval of spot ETFs for Bitcoin, investors could only access cryptocurrencies through exchange platforms.

As earlier mentioned, digital currencies and the technology surrounding them are relatively new and require buyers to be technologically savvy. The complex nature of Bitcoin and other digital assets restricted many individuals from tapping into the crypto market.

However, with the introduction of Bitcoin ETFs like IBIT, investors can purchase Bitcoin in the same way they access other investment instruments – via a brokerage account. In fact, these spot ETFs mean Bitcoin can be included in 401(k) accounts and retirement funds.

Alongside providing quicker access to digital assets, ETFs are more widely understood compared to cryptocurrencies. As such, the idea is that investors would feel safer purchasing Bitcoin via a financial instrument they’re more familiar with.

In addition, ETFs are fully regulated, thereby removing any worries surrounding Bitcoin’s unregulated nature. Aside from the benefits to investors, Wall Street’s spot ETFs are also an exciting development for the crypto market.

Finance firms like BlackRock are trusted by millions of individuals, with trillions of dollars in assets under management. Significant portions of these astonishing figures can now easily enter the crypto market via Bitcoin spot ETFs, boosting the industry and elevating Bitcoin’s price.

In other words, with the launch of Bitcoin ETFs, Wall Street isn’t just dipping its toes into crypto waters; it has positioned itself to become a major player in the industry.

Final Thoughts

Wall Street may have steered clear of Bitcoin in its early years, but that doesn’t seem to be the case any longer. Many of the big hitters in the US TradFi sector are taking major steps to enter the crypto market. With the launch of crypto exchanges and Bitcoin spot ETFs backed by companies like Fidelity Investments, Citadel Securities, and BlackRock, Wall Street has created easier, safer, and more trustworthy systems for investors to access digital assets. These moves will likely spur widespread acceptance of cryptocurrencies, leading to a boost in the crypto market.

Is Wall Street Changing its Mind About Crypto?