Wall Street’s biggest names are getting more involved in crypto but regulators still hate it
- Goldman Sachs set up a cryptocurrency trading desk in 2021 to trade bitcoin futures, becoming the first big bank to offer such a service
- Morgan Stanley analysts expect the market for luxury-brand, non-fungible tokens (NFTs) to grow to around US$240 billion by 2030
Despite its huge volatility, crypto has no end of supporters, especially in the realm of traditional finance, where major banks and asset managers are constantly expanding their services to clients.
Investment in crypto assets continued to boom in 2021, with inflows totalling US$9.3 billion last year, up 36 per cent from the US$6.8 billion logged in 2020, according to CoinShares.
And it is not just amateur or retail investors. More institutional investment is expected to come in 2022, with FTX CEO Sam Bankman-Fried anticipating significant institutional involvement in the crypto market in the coming year.
“I’ve talked to every large bank, every large investment bank, pension funds – they’re all eyeing the sector,” he said in early January.
But not everyone is a crypto fan. Regulators in particular have been vocal about their reservations.
The Financial Stability Board, the global banking watchdog, this week sounded the alarm on crypto assets in a report. It warned of the risks that could arise from the boom in adoption of crypto and called on national regulators to come up with ways to mitigate those risks, as the relationship between mainstream finance and crypto strengthens.