Morgan Stanley (NYSE:MS) disclosed a substantial stake in Grayscale’s Bitcoin Trust , totaling nearly $270 million as of March 31, according to a recent 13F filing.
This investment, along with similar disclosures from banking giants like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), and UBS (NYSE:UBS), underscores growing institutional interest in cryptocurrency among wealth management clients.
It’s worth noting that these holdings likely represent investments made on behalf of clients, rather than a direct bet on Bitcoin by the banks themselves.
Following the approval of spot Bitcoin exchange-traded funds in January, Morgan Stanley began offering allocations to its clients, albeit on an unsolicited basis. This means that clients had to propose the investment to the broker, reflecting the cautious approach taken by financial institutions towards cryptocurrency investments.
The Internet Computer-based Bitfinity platform introduces its Ethereum Virtual Machine, facilitating smart contract execution for Bitcoin protocols and enabling Bitcoin DeFi applications with Runes support.
Built on the Internet Computer protocol, Bitfinity integrates with the Bitcoin network, offering asset bridging to other blockchains. Leveraging Ethereum’s smart contract language Solidity, developers can access Bitcoin-based tokens, including BTC, Ordinals, and Runes.
The Bitfinity EVM enables the deployment of Bitcoin-based Solidity smart contracts, expanding functionality for transferring assets. As an Ethereum Virtual Machine, it serves as the backbone for executing smart contracts, akin to an operating system for Ethereum.
With Runes gaining traction since its launch alongside the Bitcoin halving event, Bitfinity aims to tap into this momentum by enabling smart contract capabilities, facilitating the development of Bitcoin DeFi applications. Despite a initial surge in activity, Runes’ network fees have stabilized following the launch frenzy.
Bank of America (NYSE:BAC) has revised its rating on Coinbase (NASDAQ:COIN) from underperform to neutral, with a raised price target of $217, up from $110.
According to the bank’s report, the current macroeconomic environment has fostered growth in crypto market capitalization and trading volumes.
While the bank acknowledges positive dynamics, it also highlights risks associated with Coinbase, including its reliance on transaction revenue and the ongoing SEC lawsuit.
Coinbase shares saw a 2.5% increase in pre-market trading on Friday following the upgrade. The stock, trading around $204 at the time of publication, has benefited from Bank of America’s revised outlook.
Bank of America’s analysts, led by Mark McLaughlin, emphasized several factors contributing to the upgrade, including Coinbase’s expense management and diversification efforts, which are expected to bolster earnings.
However, the analysts cautioned that certain risks, such as Coinbase’s dependence on transaction revenue and regulatory uncertainties related to the SEC lawsuit, could limit the stock’s potential upside.
The recent decline in Coinbase shares, over 9% following reports of potential competition from the Chicago Mercantile Exchange in spot bitcoin trading, underscores the volatility and competitive landscape facing Coinbase and similar exchanges.
Shares of Coinbase (NASDAQ:COIN) fell nearly 8% on Thursday, dropping to $202.49, following a Financial Times report that the Chicago Mercantile Exchange (NASDAQ:CME) might soon offer spot bitcoin trading amid strong interest from its clients.
Cryptocurrencies were up on the day, with the CoinDesk 20 Index, which tracks 20 of the largest digital tokens by market capitalization, rising 0.91% over the past 24 hours. Bitcoin was up by half a percent, benefiting from Wednesday’s better-than-expected inflation report. Despite the drop, COIN is up 29% year-to-date, buoyed by the rally in crypto prices since the beginning of the year.
Chicago-based CME, the world’s largest futures exchange, has a history spanning more than a century and is a financial powerhouse. Until now, Coinbase has profited from being the most trusted crypto exchange in the U.S., but this advantage could be challenged if CME enters the spot bitcoin trading market.
Designated by U.S. regulators as a “systemically important financial market utility,” CME is subject to stricter supervision. Many investors believe this designation implies the government would prevent CME from failing in a financial crisis. CME is already the leading bitcoin futures exchange in the U.S. by open interest.
The exchange has been in discussions with traders interested in trading bitcoin on a regulated marketplace, sources familiar with the matter told the Financial Times. A significant barrier for traders in dealing with digital assets is the lack of trust in crypto exchanges, particularly after several high-profile failures, including the collapse of the once-popular crypto exchange FTX.
The recent launch of spot bitcoin exchange-traded funds has provided traders with a safer way to invest in bitcoin, with over 500 institutions allocating more than $10 billion to these funds within the first three months. An additional $40 billion came from retail traders.
The US Securities and Exchange Commission has yet to decide on spot Ethereum exchange-traded funds. On May 16, Billy Markus, co-founder of Dogecoin, expressed his doubts about their approval, suggesting that the SEC is “compromised” and may reject the ETFs.
Markus made his skeptical comment in response to a social media post discussing the importance of spot Ether ETFs for the ecosystem and the potential impact of a negative decision on Ethereum. He tweeted, “nothing good will come out” of the spot ETH ETF application.
Markus’ comment reflects a broader pessimism about the SEC’s ability to make fair and unbiased decisions regarding Ethereum and cryptocurrency. Despite his skepticism, he believes the regulator’s decision on spot Ether ETFs won’t negatively impact Ethereum’s trajectory or the cryptocurrency market as a whole. This sentiment echoes the prevalent skepticism surrounding spot Ethereum ETFs.
Recently, finance lawyer Scott Johnsson suggested that Ethereum’s legal classification will play a crucial role in the upcoming ETF decisions, highlighting a key distinction in the SEC’s approach to Bitcoin and Ethereum. While Bitcoin’s security status wasn’t a major focus during spot ETF filings, Ethereum’s classification is receiving more regulatory scrutiny, indicating a shift in focus for digital assets.
The upcoming decision dates for VanEck and ARK Invest’s applications for Ethereum ETFs, scheduled for May 23 and May 24, respectively, have sparked intense speculation within the crypto industry. The potential approval of Ethereum ETFs carries symbolic importance, solidifying crypto’s legitimacy as an asset class and reaffirming its role in the evolving financial industry.
The SEC’s recognition of Ethereum’s non-security status, demonstrated by the approval of an Ethereum futures ETF for trading in October 2023, established a clear precedent for the approval of a spot Ethereum ETF. Experts believe any deviation from this path would create regulatory uncertainty and weaken market confidence.
Hong Kong’s approval of spot Bitcoin and Ethereum ETFs, as well as their trading, underscores the increasing global acceptance and recognition of the potential of Ethereum-based financial instruments.
