Bloomberg reporter Yueqi Yang joined Bloomberg senior editor Anna Irrera to talk about Wall Street’s stance on cryptocurrencies. According to Yang, certain Wall Street financial firms are forging through with their ambitions in the area. Firms interested in the field include exchanges and asset managers. Their initiatives incorporate opening new trading platforms and providing digital currency custody. They also plan on using blockchain technology to issue and trade conventional assets like bonds.
As per the discussion, some executives at these Wall Street companies view recent cryptocurrency crises, such as the demise of FTX, as a huge chance to seize a new market since they are likely to encourage further regulation. The financial institutions on Wall Street are probably looking to place themselves in the best position when regulations come in. When said rules come in, the financial giants may have the most to gain.
Yang adds that we are still quite fat from being able to buy Bitcoin (BTC) directly from the bank. Furthermore, Yang says that regulation is one of the main reasons behind financial institutions not entering the sector wholly.
However, the
Wall Street giant Morgan Stanley on cryptocurrency stablecoins
Stablecoins are essential to cryptocurrency trade, and their goods may compete with the fiat banking system, according to a research paper by Morgan Stanley. The bank mentions that American regulators have started placing restrictions on stablecoin products. The financial behemoth also highlighted the significance of stablecoin supply for cryptocurrency traders.
According to the paper, a declining stablecoin market capitalization is a sign of declining cryptocurrency liquidity and leverage, which is comparable to a quantitative tightening of the cryptocurrency market.
According to Morgan Stanley, the market capitalization of stablecoins began to decline at the same time as the Federal Reserve’s balance sheet began to shrink. Furthermore, the paper noted that the surge in BTC price led to a spike in stablecoin market capitalization in the 2021 bull run. However, in the bear market of 2022, the exact opposite has occurred.