The Bitcoin price set a new record high yesterday on news Bank of New York Mellon is to launch a new ‘digital assets division’, that will help clients acquire and safely store cryptocurrencies. The bank said the decision to launch the new division is a response to growing demand from its clients.
Roman Regelman, the bank’s head of digital commented on the news with:
“BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets.”
It’s the second big story this week to act as a positive catalyst for the Bitcoin price after Elon Musk’s Monday announcement that electric car manufacturer Tesla had invested $1.5 billion in the cryptocurrency. The Bitcoin price gained 8% to $48,481 following BNY Mellon’s announcement, before some of those gains were pared. As of early this morning in the UK, Bitcoin is trading at $47,300.
There’s something symbolic in the fact that it is BNY Mellon which becomes the first major bank to offer its clients cryptocurrency investment services. America’s oldest bank traces its history as far back as 1784, when the Bank of New York was established by Alexander Hamilton who went on to become America’s first Treasury secretary. Hamilton, born on St. Kitts and Nevis in the West Indies to Scottish parents (his father was Laird of Grange) is considered one of the USA’s founding fathers. In 2021 BNY Mellon is the world’s largest custodian bank with $2.2 trillion in assets under management.
But the most historical of North American banks is proving itself quick to react to the most modern of financial markets trends. It’s only 2 or 3 years since some of the biggest names of the financial establishment were writing Bitcoin off as a fad at best and ‘index of money laundering’, at worst. The acceleration of the digital economy over the past year since the onset of the Covid-19 pandemic has, however, seemingly gone a long way to changing perceptions.
Bitcoin’s price roughly quadrupled last year and is already up around 60% for 2021. Growing acceptance and even some hedging positions taken out by institutional investors, as well as the demographic of private investors previously wary of the cryptocurrency appears to be a major factor in its rise.
Mr Regelman indicated that it was demand from the bank’s clients that instigated the move to create the new digital assets division, saying:
“Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our service offerings to this emerging field.”
The new division is to be led by Mike Demissie, who commented it would provide “a secure infrastructure for transferring, safekeeping and issuing digital assets” and mean the bank’s clients will be able to “tap into the best available solutions in the market”.
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