Barclays Pondering Potential Foray into Crypto Trading
Originally published on: BTCMANAGER
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April 20, 2018
The U.K.’s second-largest bank, Barclays, is considering a potential foray into the cryptocurrency market. The move comes after the bank released a report that compared cryptocurrency to an infectious disease.
The bank has been working behind the scenes for some months, sounding out investor sentiments to the proposed plan as stated by anonymous sources. While details of the plan haven’t been released yet, it is believed that the bank is planning to launch a cryptocurrency trading desk.
According to Bloomberg, the bank has done a preliminary feasibility study. Andrew Smith, a spokesperson for the bank, said that Barclays is committed to ensuring that its clients aren’t left out in the emerging cryptocurrency revolution. Smith said that the bank was continually monitoring the cryptocurrency market and having discussions with its clients as to the best way forward in terms entering the market.
Barclays has been active in the blockchain industry, investing and partnering with a few blockchain startups. Like multinational financial corporations, the ambivalent sentiments towards cryptocurrency hasn’t stopped the bank from realizing the immense potential of blockchain technology.
Bitcoin’s Best Days May Be Behind It
The decision to go ahead with the creation of a cryptocurrency trading desk will ultimately rest with Tim Throsby, head of investment banking and Jes Staley, the CEO. The nascent nature of the market and its attendant risk, coupled with the regulatory compliance requirements will mean that without backing from the top executives, the plan will most likely not come to be actualized.
BTCManager recently reported that top experts at the bank believe that bitcoin reached its peak almost $20,000 in December 2017. Driven by the fear of missing out, the experts felt that traders rushed into the market thus increasing the level of speculation.
The Rise of Institutional Investments in Crypto Trading
Only recently, Börse Stuttgart, the second largest stock exchange in Germany announced the launch of its own bitcoin trading app. If the news coming out of Barclays turns out to be true, then it is yet another example of the emerging presence of institutional investments in the cryptocurrency market. This will come as good news to crypto enthusiasts who believe that mainstream financial adoption is the next step in the evolution of bitcoin and the cryptocurrency market.
Presently, apart from the involvement of hedge funds in crypto trading, the participation of mainstream finance is restricted to bitcoin futures offered by CME and Cboe. According to Autonomous Research, there are an estimated 226 crypto funds in operation with a total asset management of between $3.5 billion to $5 billion. At the start of 2017, there were only 37 of such funds, with many getting on board during the astronomical rise of bitcoin in late 2017. 2018 has seen many government regulatory measures which have resulted in more stringent monitoring and regulation of the market. Despite this, only nine of such funds have closed down.