The argument that Bitcoin is a new and unknown phenomenon is no longer
relevant with the recent widespread adoption of cryptocurrencies by public
figures, international companies and even banks.
During their early days, cryptocurrencies were mainly seen as a way to
circumvent the classic financial system. Meanwhile, the major players in this
system have also been benefiting from crypto-assets, despite the fact that banks
have long been sceptical about Bitcoin and other digital currencies.
On the one hand, many criticise cryptocurrencies, notably Bitcoin, for its infamous
volatility. Discussions arise due to a misunderstanding of the industry and
adherence to more traditional views of currency. We have huge finance giants like
Warren Buffet, saying “Bitcoin reminds me of what Oscar Wilde said about fox
hunting.” He rejected the idea that Bitcoin could become a medium of exchange
for the world, saying it was too volatile to fulfil that role properly. And while many
people flock to Buffet’s view, volatility does not have to mean that something like
bitcoin has no future in the serious space. There are also the prominent figures
who seem indifferent, like Bill Gates who said, “I don’t own Bitcoin, but I’m not a
seller of Bitcoin. So I’ve taken a neutral view.” Neutrality has both positive and
negative connotations, how this is interpreted varies to the predisposed vantage
point of the person, but in my opinion, this can be a gateway to a negative view.
So what has led to this shift in the industry’s thinking? Apparently, increasing
interest on the part of customers is pressuring banks to also offer innovative
assets and financial products. Numerous international financial institutions have
announced their entry into the world of crypto in recent months as a result. A few
months ago, Morgan Stanley became the first major bank to announce that it
would soon offer Bitcoin funds to its customers. The US banking chain JPMorgan
Chase is also working on a similar product. In addition, their rival Wells Fargo
recently announced that it would launch an actively-managed cryptocurrency
fund. In turn, Goldman Sachs currently offers its investors Bitcoin-based
derivatives and soon, Ether-based options and futures.
Mathew McDermott, Global Head of Digital Assets at Goldman Sachs, has spotted
this demand in hundreds of conversations with institutional investors and
customers, as he explained in an interview with Handelsblatt: “It’s clear that there’s
a lot of interest in getting access to Bitcoin.” Yan Zhao, President of technology
provider NYDIG, gives another reason for financial institutions’ increasing
acceptance of Bitcoin: “Banks are seeing a lot of remittances flowing to crypto
trading platforms” talking to industry magazine Cointelegraph last year.
The reason behind why traditional banks have neglected digital assets for so long
could also be due to the required technical infrastructure for these assets. To
overcome this hurdle, we at Bitpanda recently launched our Bitpanda White Label
Over the past seven years, Bitpanda has managed to build a platform that
provides users with easy access to cryptocurrencies and precious metals, used
by millions across Europe. Now, with the idea of open innovation in mind, we want
to pass on this experience and infrastructure so that digital financial products can
become even more widespread. Through Bitpanda White Label, we aim to help
both established and innovative players accelerate their digital transformation
and offer crypto-assets, as well as custody and wallet services to their clients.
This enables fintechs, traditional banks and online platforms to create a
fully-digital investing offer of their own, with the look and feel of their brand, based
on Bitpanda’s technical infrastructure. In other words: White Label partners can
simply connect their native finance or banking app to Bitpanda’s backend via a
set of APIs. Their users can still interact with the front end of the partner that they
are familiar with. Executing trades and establishing the custody of assets are
performed in the background by Bitpanda.
The cryptocurrency industry has garnered substantial mainstream attention
throughout 2021 – these developments pave the way for a brighter future in 2022.
That said, crypto is no longer a phenomenon or a trend, but it’s the reality that we
are living in. The curiosity is booming and people are starting to really understand
what is going on, moving past the shock factor of hypes and bold headlines. There
is a definite need for countries to listen to the prominent voices and not impede
their development. There is still educational work to be done; the countries that
will understand faster than the others the opportunities that crypto opens for their
economy will be far ahead of others. We are experiencing the transformation of
economy and society from within and this has massive potential.
By Bitpanda Chief Product Officer Lukas Enzersdorfer-Konrad