Markets
Is a UK-based banking giant getting into BTC and ETH trading?
Earlier today, Bloomberg reported that Standard Chartered Plc was set to launch a trading desk for Bitcoin and Ether.
Standard Chartered is a leading international banking group with a particular focus on the emerging markets of Asia, Africa and the Middle East. Founded in 1969 following the merger of Standard Bank and Chartered Bank, the company has established a strong presence in regions where it sees significant growth potential. Unlike many Western banks, Standard Chartered has a relatively limited presence in Europe and North America, consistent with its strategic focus on high-growth economies.
Headquartered in London, Standard Chartered operates through a network of more than 1,000 branches and offices in more than 60 countries. The bank offers a wide range of services, including personal and professional banking, corporate and institutional banking, wealth management and trade finance. It is particularly known for its expertise in trade finance, treasury management and foreign exchange, areas essential for companies operating in international markets.
According to the Bloomberg report, this development positions Standard Chartered as one of the pioneering global banks to enter the cryptocurrency spot trading market. Bloomberg’s sources, who requested anonymity due to the sensitive nature of the information, reveal that the new crypto bureau is set to begin operations imminently. The news agency reports that this innovative trading unit will be integrated into the bank’s existing foreign exchange trading division, whose operations are centered in London.
Although Bloomberg notes that banks like Goldman Sachs Group Inc. have been active in cryptocurrency derivatives trading for some time, it points out that strict regulations have historically prevented these institutions from directly trading the underlying crypto assets. The outlet points out that the 1,250% risk weight proposed by the Basel Committee on Banking Supervision for unhedged crypto exposure has presented significant challenges for banks seeking to generate profits in this area.
In response to these developments, Bloomberg cites a statement from Standard Chartered, which affirms the bank’s commitment to working closely with regulators to meet institutional client demand for Bitcoin and Ethereum trading. The news agency reports that the move aligns with the bank’s broader strategy to support clients across the digital asset ecosystem, encompassing areas such as access, custody, tokenization and interoperability.
The Bloomberg article highlights Standard Chartered’s growing involvement in the crypto sector, highlighting the bank’s stakes in two crypto companies, Zodia Custody and Zodia Markets. These companies offer a range of services from custody to over-the-counter transactions, thereby strengthening the bank’s position in the digital asset space.
Also mentioned was Standard Chartered’s launch of Libeara, a blockchain unit aimed at helping institutions tokenize traditional assets. Bloomberg said that this unit is currently supporting the creation of a tokenized government bond fund using the Singapore dollar, demonstrating the bank’s commitment to blockchain technology beyond cryptocurrency trading.
In March, Standard Chartered made headlines by significantly raising its year-end Bitcoin (BTC) price forecast from $100,000 to $150,000. According to a report According to CoinDesk, based on an investment note emailed on March 18, 2024, this upward revision reflects the bank’s increased optimism about Bitcoin’s value trajectory. The note further predicts that BTC could peak at $250,000 next year before stabilizing around $200,000.
The bank’s analysis draws a compelling parallel between the current situation of Bitcoin and the historical impact of gold exchange-traded funds (ETFs) on gold prices. Standard Chartered suggests that the introduction of spot Bitcoin ETFs in the United States could have a similar transformative effect on the value of Bitcoin, similar to what gold ETFs have done for gold. This comparison serves as the basis for their medium-term Bitcoin price projections.
The investment note said: “We believe the gold analogy – in terms of both the impact of ETFs and optimal portfolio composition – remains a good starting point for estimating the “correct” price level. » of BTC in the medium term. According to the bank’s projections, if spot ETF inflows reach their median estimate of $75 billion, or if reserve managers start buying BTC, the value of Bitcoin could potentially reach $250,000 in 2025.
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