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- The launch of Bitcoin custody service by Deutsche Bank has proven to be mutually beneficial for the bank and the coin.
- The growth underscores why financial institutions now need Bitcoin and crypto in general.
Leading financial service provider Deutsche Bank is the latest asset manager to launch crypto custody services to its institutional clients. Following the announcement of this major offering, the share price of the company jumped by 10% to 11.3 EUR. This immediate bullish trigger is evident investors are bullish on the move from the bank.
In collaboration with a Swiss-based cryptocurrency firm known as Taurus, Deutsche Bank will be able to hold a limited number of cryptocurrencies including Bitcoin (BTC) for its clients, as well as tokenized versions of traditional financial assets. This is the bank’s first foray into such services.
Three years ago, Deutsche Bank indicated interest in offering crypto trading in a World Economic Forum (WEF) paper. While Deutsche Bank has always maintained an less optimistic stance about crypto, the reason for the change in the company’s digital currency policy may not be far-fetched seeing how far the industry has grown.
2022 was a tumultuous year for the digital asset industry as there were multiple collapses of top cryptocurrency firms including FTX, BlockFi, and many others. The implosion left a huge hole of about $2 trillion in the ecosystem per market capitalization with investors as victims of this loss. While it’s been more than a year since the first protocol implosion featuring Terraform Labs, the resilience of firms in the industry has underscored the key fundamentals behind crypto that is attracting the likes of Deutsche Bank.
Beyond Deutsche Bank: Traditional Financial Firms Interested in Crypto
Besides Deutsche Bank, many mainstream financial firms are now considering how blockchain technology could be explored for the trading and settlement of traditional financial assets. Zodia Custody, a subsidiary of Standard Chartered recently partnered with Polkadot to extend institutional support to the Polkadot ecosystem by providing robust custody services for digital assets.
BNY Mellon and Societe Generale now equally offer crypto custody services to institutional investors. Paul Maley, Deutsche Bank’s global head of securities services highlighted that as the digital asset space is expected to encompass trillions of dollars in assets, it is bound to be seen as a priority for investors and corporations alike.
Shortly after Deutsche Bank launched the crypto custody service, the price of Bitcoin (BTC) saw a surge in price, reaching above $26,000. At the time of this writing, BTC is trading at $26,627.44 after surging by 1.19% in the past 24 hours, a figure that marks a new high for the month. This resurgence in Bitcoin’s price underscores why the cryptocurrency may actually be good for traditional banks.
Samer Hasn, market analyst at Australia-based global multi-asset broker XS.com pointed out that the rise in the price of BTC “coincides with a noticeable return in investor sentiment.” Also, it is worth noting that Deutsche Bank’s reputation as a top asset lender with over $1.4 trillion may have largely contributed to the sudden uptrend in the broader crypto market.
Traditional asset management firms’ interest in Bitcoin is growing each day. Many of them including BlackRock, Fidelity, and WisdomTree are currently awaiting a decision from the United States Securities and Exchange Commission (SEC) over their applications for a spot Bitcoin Exchange Traded Fund (ETF) product.
