- The recent buzz about institutional interest in crypto saw Bitcoin surge to $30,000.
- Charles Schwab and JP Morgan clarify their positions on crypto initiatives.
- Their answers betray that they are still cautious about the crypto space.
In recent weeks, the crypto industry has been buzzing with news of institutional interest, from the surge in Bitcoin ETF filings by Fidelity and BlackRock to the launch of institutional-backed crypto exchange EDX Markets, backed by Citadel, Fidelity, and Charles Schwab. Even JP Morgan, a stalwart of traditional finance, has recently made headlines by expanding its institutional blockchain payments system into Euros.
These developments have led many to believe that crypto is at the cusp of institutional adoption, propelling Bitcoin past $30,000. But is this really the case? To get a clearer picture, we contacted representatives from Charles Schwab and JP Morgan, two institutions at the heart of these developments.
Schwab’s EDX Investment: ‘For Us, Nothing Changed’
In our conversation with Adam Bromberg, Director of Public Affairs at Charles Schwab, we sought to understand Schwab’s position on crypto investments. The asset manager was one of the firms that invested in EDX Markets in September 2022.
Charles Schwab was a passive investor in EDX and remains so, Bromberg clarified. “Nothing has changed significantly since September. At Schwab, we do not offer any direct crypto trading services due to a lack of regulatory clarity,” Bromberg explained.
While the investment giant does not currently offer any crypto services, Bromberg said the firm is “keeping an eye on the regulatory model for cryptocurrencies.”
We also asked Bromberg whether he sees an uptick in institutional interest in crypto. Bromberg said it’s hard for him to comment on other firms’ actions. “Each brokerage will find ways to enter the market based on its assessment,” he added.
JP Morgan: ‘JPM Coin is Not a Cryptocurrency’
To gain more perspective, we also reached out to JP Morgan, the world’s largest investment bank. Amid the buzz of institutional interest in crypto, JP Morgan introduced euro-denominated blockchain payments.
Some in the crypto space saw this initiative as a part of a broader institutional trend toward crypto. However, the response we received from Richard Hillary, who looks after media relations for JP Morgan’s blockchain work, provided a different perspective.
Hillary emphasized that their platform, known as JPM Coin, is not a token or a cryptocurrency. The platform is essentially a blockchain-based ledger for clients’ bank accounts. This doesn’t ‘tokenize’ deposits, but rather uses the blockchain platform ledger to hold deposit accounts for our clients,” Hillary explained.
This clarification underscores the distinction between JP Morgan’s blockchain work and the broader crypto industry. While the bank leverages blockchain technology to enhance its services, it is not venturing into cryptocurrencies or tokens. This approach reflects a cautious and measured stance towards cryptocurrencies’ volatile and regulatory-uncertain world.
On the Flipside
- While traders are excited about a potential surge in institutional interest, Schwab and JP Morgan spokespeople were much more cautious.
- According to multiple industry reports, most major institutional investors left crypto after the collapse of FTX in November 2022.
Why This Matters
Understanding the stance of major institutions like Charles Schwab and JP Morgan is crucial for crypto traders. Due to their vast financial resources, traditional financial institutions have an outsized effect on the markets.
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