Bitcoin’s explosion this year has caught the attention of Wall Street banks, leaving them turning to the assets. The digital assets, which they’ve always looked at with score, have now become one of the most sought-after. With the current profits in the crypto industry, they have decided to forgo their shame and reputation.
Bitcoin’s transformation from a speculative asset to a profit-taking avenue is nothing short of miraculous. With the approval of Bitcoin ETFs, Trump’s return to office, and his pro-crypto stance, Wall Street is looking to get a piece of the action.
Big money and bigger risks for Wall Street
Leading the Wall Street charge are CitiGroup and Barclays, underwriting numerous convertible bond offerings for Bitcoin champion Microstrategy. JPMorgan is also not left out, pitching its tent with mining giants Core Scientific and Mara.
Goldman Sachs is also making moves, raising funds for Applied Digital, a company that builds Bitcoin data centers for miners. Presently, there are about $13 billion already issued crypto-related convertible bonds, with most of it happening this quarter.
Financial institutions are also winning big, raking in funds of about $200 million from the deals. Microstrategy has also recorded 2% fees from its $21 billion equity offering. However, this does not mean that Wall Street is wholeheartedly embracing crypto. The bigger players are still picky, seeing crypto exchanges like Coinbase as a safer bet compared to miners.
Even among firms with Bitcoin appetite on Wall Street, there are reputational issues. Microstrategy might be a big Bitcoin holder, but Michael Saylor’s legal history isn’t exactly clean. Still, the fees are huge, and banks are not asking questions.
With a few banks joining in the fun, the rest can watch from the sidelines. Competition remains tough, and no bank wants to watch as others get ahead of them. However, the love for Bitcoin has its limit, with the banks knowing which firms to choose and those to reject. Sectors like adult entertainment and cannabis are legal but they’re a no-go area.
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