1 in 5 financial institutions looking to invest in cryptocurrencies

Written by Oliver Wade
15/05/2018

One in five financial institutions is considering trading cryptocurrencies within the next 12 months, according to a survey recently published by Thomson Reuters.

Among those respondents who said they were considering trading in cryptocurrencies such as bitcoin, 70% said that they were planning to begin trading in the next three to six months.

Despite regulatory warnings that cryptocurrencies carry a great deal of risk and are prone to scams, the buying and selling of the digital currency spiked at the end of 2017, and institutional involvement is expected to grow, with banks examining client interest and several hedge funds attempting to trade the digital coins, Reuters has said.

However, the crypto market has experienced several falls this year, with many critics warning investors to stay away.

Following the cryptocurrency market appreciation of 1,200% in 2017, and with further investors looking to buy the virtual currency, Capital.com CEO Ivan Gowan argues that regulatory concerns must be addressed “head on” if the market is to be “fully embraced” by the mainstream of the financial services industry.

Gowan said: “These findings show a significant perceptual change towards cryptocurrencies, and it is reassuring to see that the consumer demand for digital currencies is being taken seriously. Many financial institutions such as Goldman Sachs have moved away from outright denunciation of the market and are cautiously looking for ways to better meet the demands of their clients through participation.

“Concerns from regulators over the applications and impact of digital currencies remain prevalent however, and these questions must be addressed if we are to see a complete acceptance from the traditional financial services industry. Cryptocurrencies are still seen as a risky investment by many institutional traders, as prices rapidly fluctuate, and new stories of market corruption consistently hit the news. Facebook and Google recently moved to ban the advertisement of ICOs on their platforms for example, and anxieties remain about the use of digital currencies to make illegal transactions on the dark web.”

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