The cryptocurrency space has gained massive adoption over the past year, and it keeps increasing, with JPMorgan set to offer its wealthy clients access to Bitcoin funds
This month was very eventful in the cryptocurrency space. Crypto exchange Coinbase officially launched on the NASDAQ stock exchange, becoming the most valuable company in the industry at the moment. In the same week, Bitcoin reached a new all-time high close to $65k, representing a 100% price increase since the start of the year. Gary Gensler was finally announced as the new SEC chairman. This appointment brought optimism to the American crypto space, as they believe a Bitcoin ETF will soon be on the cards.
The adoption of cryptocurrencies by financial institutions continued this month, with PayPal-owned Venmo announcing that its users can now buy, sell and store cryptos on its platform. Venmo’s over 70 million users can now buy cryptocurrencies directly from the app. For the first time, China acknowledged cryptocurrencies as investment assets. A PBoC deputy governor said the central bank views cryptos as alternative investment vehicles and will need to roll out regulations to ensure the safety of investors. Finally, the Facebook-led Diem project announced that it would launch its first stablecoin before the end of the year. The project, previously known as Libra, was launched in 2019 but has faced regulatory challenges globally.
Here’s a round-up of this week’s news:
JPMorgan to offer private clients access to Bitcoin funds
JPMorgan Chase, one of the largest investment banks in the United States, is set to offer its private clients access to Bitcoin funds. The $3 trillion bank is expected to launch the service in the coming months, allowing wealthy investors to gain exposure to the top digital currency. JPMorgan would be following in the footsteps of Morgan Stanley and Goldman Sachs, who have already begun offering such a service to their clients. The move would be a change in perspective for JPMorgan, as the bank and its CEO were critical of Bitcoin and cryptocurrencies in the past.
Interest in cryptocurrencies has been massive: PayPal CEO
PayPal entered the cryptocurrency space a few months ago, and the CEO revealed that demand for cryptos on their platform exceeded expectations. Dan Schulman told TIME magazine that PayPal had been monitoring the crypto space for the past six years but thought it was too soon to start offering services. However, he pointed out that the demand on the crypto side has been several times more than what the company expected. There is a lot of excitement around cryptocurrencies as more people now see them as alternative investment options. The growth led PayPal’s subsidiary, Venmo, to start offering cryptocurrency services to its clients. Venmo customers can now buy, sell, and hold cryptocurrencies directly from their account.
Tesla sold $272 million worth of Bitcoin
Electric car manufacturer Tesla revealed in its latest earnings report that it sold 10% of its Bitcoin holdings, earning $272 million in the process. The company bought $1.5 billion worth of bitcoins earlier this year, making it one of the corporate entities with the highest Bitcoin holdings. Tesla also began accepting bitcoins as payment for its electric vehicles. Despite selling $272 million worth of bitcoins, Tesla still holds $2.5 billion in the cryptocurrency. Tesla bought Bitcoin when it was trading around $39,000, and the cryptocurrency rallied to a new all-time high above $63,000 within a few months. The company still remains one of the largest Bitcoin holders in the world.
Germany opens up the crypto space to institutional investors
One of the biggest developments this week emerged from Germany. Europe’s leading economy passed new legislation that would allow thousands of institutional investment funds to invest up to 20% of their portfolio in cryptocurrencies. The law would see over 4,000 Spezialfonds gain exposure to the leading cryptocurrency. The development is a huge one considering the Spezialfonds control over $1.8 trillion. The cryptocurrency adoption by these investment funds could fetch the crypto space nearly $450 million. The legislation is also designed to maintain Germany’s position as one of the leading global financial hubs.
US SEC postpones VanEck Bitcoin ETF decision
The United States Securities and Exchange Commission (SEC) played a familiar card this week when it postponed its approval or rejection decision on the VanEck Bitcoin exchange-traded fund (ETF) decision. The regulator was expected to decide on the proposal in a few days but has now shifted it till June. The SEC usually gets 45 days to make a decision after publicly acknowledging that it has started reviewing a proposal. However, the commission can extend its review for up to 240 days after the initial filing. The United States is yet to approve a single Bitcoin ETF application, while Canada recently approved three filings earlier this year.
Binance to launch its NFT marketplace soon
Binance, one of the top cryptocurrency exchanges globally, is set to launch its nonfungible token (NFT) marketplace in June. The decision comes at a time when NFTs are making headlines in several industries. NFTs have become the trend in industries such as art, music, film and sports. Binance insists that its NFT platform would provide users with the necessary liquidity required to make it easy for people to trade digital art pieces. The exchange said the NFT marketplace would bring together artists, creators and crypto enthusiasts worldwide.
NFL stars Culkin and Lawrence adopt cryptocurrencies
More adoption news for cryptocurrencies came from the National Football League (NFL) this week. Trevor Lawrence and Sean Culkin signed deals that would see them receive a huge chunk of their salary and endorsements in cryptocurrencies. Trevor Lawrence signed an endorsement deal with Sam Bankman-Fried’s Blockfolio. As part of the deal, Lawrence has already received his bonus in Bitcoin. The payment was sent to his personal Blockfolio account. Sean Culkin became the first NFL player to agree to receive 100% of his salary in Bitcoin. The Kansas City Chiefs player is set to receive $920,000 in Bitcoin this year as his salary. Culkin said his huge belief in cryptocurrencies as the ultimate store of value convinced him to make the long-term investment.
Paxos becomes a federally-chartered crypto bank
Paxos became the latest cryptocurrency firm to receive conditional approval for a bank charter from the Office of the Comptroller of the Currency’s (OCC). This approval makes Paxos a federally-chartered bank, allowing it to operate in all states across the United States. Receiving the OCC charter makes it easier for a company to operate as it doesn’t have to obtain an individual banking license from each state. Paxos now joins Anchorage and Protego, who received their OCC charter earlier this year.