Crypto Banks Coming | Bitcoin Muscles In On Defi

As far as crypto has come since the broad market selloff in March, 2021 is being primed to be even more consequential for the industry. Now, with the bitcoin and cryptocurrency community looking forward to a slew of developments in 2021—including the much-anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and potentially industry-defining U.S. cryptocurrency regulations— Wall Street giant Wells Fargo WFC -1.6% said it expects to be “discussing the digital asset space more” next year.

CRYPTO MINDSHARE CREEP

As far as crypto has come since the broad market selloff in March, 2021 is being primed to be even more consequential for the industry. Now, with the bitcoin and cryptocurrency community looking forward to a slew of developments in 2021—including the much-anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and potentially industry-defining U.S. cryptocurrency regulations— Wall Street giant Wells Fargo WFC -1.6% said it expects to be “discussing the digital asset space more” next year.

John LaForge, head of real asset strategy at Wells Fargo, wrote in an investment strategy report this week that “Over the past 12 years, [bitcoin and cryptocurrencies] have risen from literally nothing to $560 billion in market capitalization… Fads don’t typically last 12 years. There are good reasons for this—reasons that every investor should hear. As we roll into 2021, we’ll be discussing the digital asset space more—its upside and its downside.”

NOTHING WORTH HAVING COMES EASY

This certainly applies to crypto, as markets have stalled in the last week. After flirting with $20,000 and a new all-time high, bitcoin prices temporarily fell below $18,000 multiple times this week, declining to their lowest since late November before bouncing back. This development was not surprising to analysts who closely studied bitcoin’s technical charts and on-chain data. For instance, whale (large scale holders) inflows into exchanges increased to the “bearish zone” this week,indicating that many were convinced that the current phase of this rally had run its course and they planned to take some profits off of the table.

That said, most industry watchers continue to have a bullish outlook in the near-term, much of it based in the continued institutional interest in acquiring long positions in the asset. This week MicroStrategy signaled its intention to issue debt in order to buy more bitcoin. On Friday it announced that it had ultimately raised $650 million. Additionally, news just broke that MassMutual entered into a $100 million position in bitcoin and even invested $5 million in the financial services firm, NYDIG. 

CRYPTO BANKS FOR EVERYONE

Long faced with challenges opening bank accounts to fund operations, crypto firms have turned to seeking their own banking charters. Most recently, bitcoin and cryptocurrency payments company BitPay filed paperwork with the U.S. Office of the Comptroller of the Currency (OCC) to create a national bank—named the BitPay National Trust Bank. BitPay’s bank bid comes after OCC acting comptroller Brian Brooks, who served as the chief legal officer of major U.S. bitcoin and cryptocurrency exchange Coinbase from 2018 until earlier this year, revealed plans to empower payment firms to operate across state lines with a single set of consolidated rules and said the OCC is ready to begin accepting applications.

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