After months of price rally, investors are increasingly seeking exposure to Bitcoin. Products traded with Bitcoin are seeing record trading volumes. Meanwhile, more large banks are reportedly trying to get into the crypto space, including Goldman Sachs.
High demand for Bitcoin and Crypto products
As the price of Bitcoin has risen rapidly in recent months, more and more investors are looking for exposure to the cryptocurrency. Bitcoin price has increased by around 24% since the beginning of the year and by over 90% since the beginning of December.
In particular, one exchange-traded Bitcoin product, BTCE, recorded an average daily trading volume of $ 69 million in the first eleven days of January, the Financial Times reported on Friday, citing data from Deutsche Börse where it is traded. This week, the main Swiss exchange announced that its crypto trading volume hit a record high of $ 1.2 billion in 2020. The exchange now lists 34 exchange-traded crypto products.
Grayscale Investments’ Bitcoin Trust averaged nearly $ 1 billion in daily revenue for the first two weeks of this year, more than nine times the 2020 average. Bitcoin Trust’s assets under management increased from $ 1.8 billion to $ 17.5 billion over the course of the year.
Canadian wealth manager 3iq says its Bitcoin fund has reached a milestone, with assets under management of more than one billion Canadian dollars ($ 785 million). In addition to the Bitcoin fund, the company offers the Ether fund and a global crypto asset fund.
Chart of 3iq’s Bitcoin Fund. Source: 3iq
Big banks want in, including Goldman Sachs
As Bitcoin continues to outperform other assets, more and more large companies are trying to break into the crypto space. Jeff Currie, global director of commodities research at Goldman Sachs, said last week that the Bitcoin market “is gradually maturing” after calling BTC a “hedge against retail inflation”. The investment bank is now rumored to have made a request for information (RFI) to investigate the provision of a digital asset custody service.
The RFI was reportedly sent to a prominent company in the crypto custody niche late last year. An unnamed source from Goldman Sachs said the company speaks to several companies that focus on custody services.
Recently, the US office of the Comptroller of the Currency (OCC) gave Anchorage conditional approval to become a national digital bank. Anchorage co-founder Diogo Mónica told CNBC last week that regulatory approval will encourage many large institutional players to offer their own crypto services, including custody.
Other banks and financial services giants that have recently stepped into the crypto space include Spain’s second largest bank BBVA, Standard Chartered Bank, Southeast Asia’s largest bank DBS, and Italian insurance giant Generali. Some of them only offer crypto custody services while others also offer bitcoin trading services.
What do you think of the increasing demand for crypto? Let us know in the comments below.
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Bitcoin funds, bitcoin records, crypto records, demand for bitcoin, demand for crypto, ETF, ETP, Goldman Sachs, grayscale, jpmorgan, record high
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