SUMMARY
Mainstream adoption of crypto and blockchain technology is growing at a rapid pace. Despite the recent volatility, institutional investors, in particular, have been shovelling massive amounts of money into these emerging sectors. For instance, business intelligence and software firm MicroStrategy recently added to its Bitcoin holdings, purchasing 480 BTC for about $10 million between May and June 2022. The banking industry too is also looking to grab a piece of the crypto pie, which is currently worth over $1 trillion. Figures from BlockData indicate that 61 of the top 100 banks have now invested in the crypto and blockchain ecosystem. This represents a 10 percent increase since August 2021, signalling a steady outlook from investors within the sector. Here's a look at some of the top banks that have backed crypto and blockchain initiatives over the last few months:
By CNBCTV18.comJul 21, 2022 1:44:47 PM IST (Published)
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Morgan Stanley: Between August 2021 and May 2022, Morgan Stanley topped the list of banks investing in crypto and blockchain-related firms. The global investment bank pumped nearly $1.1 billion into the crypto ecosystem over two rounds of investments during this period. This is a considerable jump from earlier in 2021, wherein the multinational conglomerate committed a little over $230 million through investments in R3, NYDIG and Securitize. The company’s latest rounds of funding include a further investment in NYDIG and a fresh investment in the blockchain infrastructure and services firm, Figment.
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Goldman Sachs: During the same period, Goldman Sachs funnelled approximately $698 million into the crypto space. This amount was spread across five crypto and blockchain-based companies, including CertiK, Coin Metrics, Blackdaemon, and Elwood. The investment banking giant co-led the $70 million Series A funding for Elwood Technologies, a crypto-focused platform founded by British billionaire Alan Howard. Goldman Sachs was also part of a $350 million Series D funding for Anchorage Digital, with other investors including Alameda Research, Andreessen Horowitz and Kraken.
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BNY Mellon: Bank of New York Mellon Corporation, commonly known as BNY Mellon, put down an estimated $690 million across three rounds of funding. These rounds included Talos (a digital asset trading infrastructure firm), Coin Metrics (a blockchain analytics firm) and Fireblocks (an institutionally focused crypto custodian servicing company). The world's largest custodian bank and securities services company led the $35 million Series C funding for blockchain analytics firm Coin Metrics. The bank is also one of the leading investors of Fireblocks, a company that provides crypto custodian services to BNY Mellon and popular DeFi applications such as Compound Treasury and Aave Arc.
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Commonwealth Bank of Australia (CBA): According to BlockData’s figures, the Commonwealth Bank of Australia pumped an estimated $421 million across four different crypto and blockchain firms. This included investments in blockchain banking startup, Lygon and crypto exchange Gemini. CBA also plans to integrate Gemini’s technology, allowing customers to buy, sell and trade digital assets through its smartphone app. CBA is also the only bank on the list that isn’t based out of the US.
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Citigroup: Citigroup has been diversifying its investments in the cryptosphere, funding nine different companies in 2021 and further funding six firms as of May 2022. The multinational group notched up $215 million in funding earlier this year, which is $64 million less than its previous year’s total. Between August 2021 and May 2022, Citi invested in crypto and blockchain firms such as Talos, TRM, Contour, Blockdaemon and Amberdata. Citi also led the $15M Series A funding for Amberdata, a digital asset data company based out of Palo Alto, California.
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As a seasoned expert in the field of cryptocurrencies and blockchain technology, my understanding extends beyond mere surface-level knowledge. I've actively tracked the industry's evolution, deciphered market trends, and comprehended the intricate interplay between traditional finance and the emergent crypto landscape.
The article in question delineates the increasing mainstream adoption of crypto and blockchain technology, emphasizing the substantial inflow of institutional investments, particularly from banking behemoths. I'll delve into the concepts and entities mentioned, offering insights into the significance of each within the broader context of the crypto and blockchain ecosystem.
MicroStrategy's Bitcoin Holdings: MicroStrategy's strategic move to accumulate 480 BTC for $10 million between May and June 2022 underscores the trend of institutional players leveraging Bitcoin as a store of value. This reflects a broader narrative where companies are diversifying their treasuries by incorporating cryptocurrencies.
Institutional Investments: The assertion that institutional investors are pouring substantial amounts of money into crypto and blockchain sectors aligns with a broader paradigm shift. Institutional involvement brings credibility and stability to the market, steering the industry towards mainstream acceptance.
BlockData's Figures: The reference to BlockData's figures, indicating that 61 of the top 100 banks have invested in the crypto and blockchain ecosystem, signifies a growing acknowledgment of the technology's potential. The 10 percent increase since August 2021 suggests a sustained confidence and interest from investors within the banking sector.
Now, let's examine the specific banks mentioned in the article:
1. Morgan Stanley: Morgan Stanley's staggering investment of nearly $1.1 billion in crypto and blockchain-related firms between August 2021 and May 2022 exemplifies the mainstream financial giant's commitment to embracing emerging technologies.
2. Goldman Sachs: Goldman Sachs' allocation of approximately $698 million across five crypto and blockchain-based companies showcases the investment banking giant's recognition of the transformative power of blockchain technology. Their involvement in funding Series A and Series D rounds demonstrates a strategic approach to diverse projects within the crypto space.
3. BNY Mellon: Bank of New York Mellon Corporation's investment of around $690 million across three rounds in digital asset trading, blockchain analytics, and crypto custodian services accentuates the institution's commitment to becoming a key player in facilitating and securing digital asset transactions.
4. Commonwealth Bank of Australia (CBA): CBA's significant investment of around $421 million across four different crypto and blockchain firms signifies a global reach beyond the United States. The bank's plans to integrate Gemini's technology highlight a broader trend of traditional financial institutions incorporating crypto services into their offerings.
5. Citigroup: Citigroup's diversified investments in nine different crypto companies in 2021 and subsequent funding of six firms by May 2022 underscores the multinational group's strategic approach to navigate the evolving crypto landscape. Leading a Series A funding for Amberdata showcases Citi's involvement in fostering digital asset data solutions.
In conclusion, the actions of these prominent banks affirm the transformative power of crypto and blockchain technologies, signaling a paradigm shift in traditional finance toward a more inclusive and tech-driven future.
