The crypto space has some big players entering. While for years, Bitcoin and crypto were considered taboo by main street and Wall Street – reserved for “nerds” and criminals – the crypto space is growing up. Institutional players are laying expensive groundwork, pouring millions of dollars into infrastructure to support bitcoin and crypto trading and products. Below we’ll explore just a few of these movers and shakers, and what exactly it is they’re up to.
Founded by Michael Bloomberg in 1981, Bloomberg is an internationally recognized name in global financial services from enterprise solutions to data. They are also a pillar in the world of financial news. Their media serves over 80 million consumers from 167 offices around the world through television, print, radio, digital, and live events, and their “Bloomberg Terminal” provides real-time financial market data to over 320,000 traders, market makers, and financial professionals. In May 2018, Bloomberg partnered with hedge fund manager Michael Novogratz to launch the Bloomberg Galaxy Crypto Index. A “transparent benchmark for cryptocurrency investors,” it was prompted by their “clients’ growing interest in cryptocurrencies” and intended to provide “a strong foundation on which the cryptocurrency ecosystem will continue to grow and mature.” In addition, Bloomberg now offers “Bloomberg Crypto” where investors can catch up on the latest news and subscribe to reports regarding developments in the crypto space. While news is not official, details have also surfaced that would suggest Bloomberg is in the process of building a terminal specifically for crypto data services.
Fidelity Investments is a financial services company with seven trillion in assets under administration. With a revenue of almost 20 billion per year, this international company has been assisting customers with investment decisions for over 70 years. Beginning their research into cryptocurrency in 2014, they announced their official entrance into the crypto space via the launch of Fidelity Digital Assets in October 2018. Their services are geared towards institutional investors but available for individuals as well. Fidelity Digital Assets offers clients custody, trading, and onboarding services and “[envisions] a future where all types of assets are issued natively on blockchains or represented in tokenized format.” On November 19, 2019, Fidelity Digital Assets was officially authorized to operate in the state of New York. Expecting to more than double their trading liquidity by the end of the year, they also anticipate connecting with their first exchange in the coming months.
Bakkt is the brainchild of the same people behind the New York Stock Exchange. The Intercontinental Exchange, which operates 12 regulated exchanges and markets including the NYSE, founded Bakkt in 2018 with the intention of launching its first product in the form of physically-settled Bitcoin futures. Beyond futures, however, Bakkt has partnered with a host of venerable players to offer custody services as well as merchant solutions. Microsoft, the Boston Consulting Group and perhaps most notably (as far as mainstream consumers go) Starbucks are all part of Bakkt’s plan to bring the cryptocurrency market to consumers as well as investors. Allowing customers to “convert their digital assets into U.S. dollars for use at Starbucks,” Bakkt is “designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security, and utility.” Backed by the same cybersecurity tools as ICE and the NYSE, funds held in the Bakkt Trust – a licensed custodian regulated by the New York State Department of Financial Services – are also covered by 125 million in insurance. Bakkt’s futures officially launched on September 23rd, and its ultimate goal is to integrate with the entire 200 billion plus (as it stands so far) of the digital asset market.
Other Players: The CME and the EEA
In December 2017, the Chicago Mercantile Exchange was one of the first vaunted institutions to enter the cryptocurrency space. Responsible for the largest range of derivatives in the world from agriculture to energy and metals, the CME exchanges three billion worth of contracts a year on average, or roughly one quadrillion dollars. The CME’s Bitcoin trading volume increased over fifty percent from 2018 to 2019, and currently, CME Bitcoin futures are trading an average daily volume of almost 300 million. Meanwhile, the Ethereum Enterprise Alliance – while not explicitly offering any product – is joined by the likes of ING, The Bank of New York Mellon, Banco Santander, and J.P. Morgan Chase and serves to assist enterprise clients in utilizing the Ethereum blockchain. J.P. Morgan’s stablecoin, JPM Coin, is one of the results of this effort. Supported by their in-house Quorum blockchain, JPM Coin is built on Ethereum.
Beyond a handful of companies, cryptocurrency is rapidly making its mark in the world. Backed by millions, even billions, of investment from venerated participants in finance, it is no longer a neat idea hiding out in the dark parts of the internet. The above are a few examples of the groundwork being laid by major players. However, the list is in no way comprehensive, as they are joined by many others from hedge funds to exchanges and more.