Key points to remember
- BNY Mellon will begin receiving Bitcoin and Ethereum for clients this week after gaining approval from New York’s financial regulator, The Wall Street Journal reported.
- The age-old Wall Street bank has increasingly taken steps to embrace crypto this year.
- While the crypto winter has cast doubt on the future of the space, institutional interest in the space is still high.
Share this article
BNY Mellon has taken several steps to embrace digital assets this year.
BNY Mellon Offers Custody of Cryptos
America’s oldest bank just got the green light to start receiving crypto on behalf of its customers, The Wall Street Journal reported.
According to a Tuesday report, BNY Mellon will begin receiving Bitcoin and Ethereum from select customers starting today after receiving approval from the New York State Department of Financial Services.
BNY Mellon will provide custodial services to clients who hold the two major crypto assets, by storing the private keys used to unlock their crypto wallets. The bank will use software developed by Fireblocks to store assets and track the paper trail of all crypto funds coming into the bank via Chainalysis, according to the report.
This decision marks another big step in the BNY Mellon cryptosphere. The institutional giant has been paying close attention to the digital asset space since the 2021 bull run, first announcing plans to offer Bitcoin custodial services in 2021. It has since backed Fireblocks and the trading platform crypto Pure Digital, signaling its belief in the growth of the industry as a whole. It also partnered with one of the biggest crypto investment firms, Grayscale, in July 2021 to help the fund manager convert its flagship Bitcoin Trust product into an exchange-traded fund (Grayscale did not yet obtained Securities and Exchange Commission approval).
BNY Mellon’s belief in crypto should inspire confidence in the asset class among other big names on Wall Street. Founded by Alexander Hamilton in 1784, BNY Mellon is America’s oldest bank. He oversees more than $2 trillion in assets under management, most of which come from wealthy fund managers.
Interest from Wall Street through Crypto Winter
Other Wall Street institutions have signaled interest in crypto since the space exploded in 2021, though a $2 trillion pullback has lasted months since the market peaked in November. The latter did little to quell general skepticism towards the famously volatile asset class. Investment management titan Ruffer was another major institutional name to spark huge excitement in the crypto space when it invested in Bitcoin last year; the company later revealed that it had sold its holdings at a profit of $1 billion to “avoid the mania”.
Outside of Wall Street, Elon Musk’s Tesla also made headlines around the world when it dipped its toes into top crypto with a $1.5 billion bet, though the car company electric marked a losing trade, emptying most of its loss-making holdings in the second quarter of this year.
Yet while the ongoing bear market has taken away many former giants – crypto favorites Terra, Celsius and Three Arrows Capital among them – and led some in traditional finance to doubt the future of tech, it There are clear signs that some of the wealthiest are still interested in the nascent space.
Goldman Sachs began offering over-the-counter crypto trading to its clients as the market fell earlier this year, and in September the Nasdaq launched its own custody service for institutions. Some names praised on Wall Street have also hinted that they believe crypto has a bright future, even with a US recession on the cards. Stanley Druckenmiller said last month that the space could see a “rebirth” if the public loses faith in central banks, while Paul Tudor Jones called for an increase in the value of the asset class once the The Fed will have pivoted on its economic tightening policy. Speaking to CNBC on Monday, the billionaire investor pointed to the scarcity of Bitcoin and Ethereum as the fundamental reason for his bullish outlook.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.