Over the past week, Citigroup and Morgan Stanley have doubled down on their plans to offer tradable instruments and products around Bitcoin.

Alistair Milne, the chief information officer at Altana Digital Currency Fund, stated that the increasing interest towards cryptocurrencies as an asset class by banks and regulated financial institutions is crucial, as it demonstrates the rapidly growing demand for Bitcoin from institutional investors.

“Goldman, Citibank, ICE. Now Morgan Stanley. All launching Bitcoin products and services because there’s no institutional demand. Institutional money took the hedge fund industry from $300 billion to $6 trillion,” Milne said sarcastically, implying that banks are seeing solid demand from institutions.

Led by Goldman Sachs, Now All Banks are Coming to Crypto

The wave of banks and regulated financial institutions entering the cryptocurrency sector by offering Bitcoin products was initiated by Goldman Sachs in mid-2018.

In June, Goldman Sachs CEO David Solomon publicly said that the bank has been clearing futures around Bitcoin on behalf of its clients.

“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too. Goldman Sachs must evolve its business and adapt to the environment.”

The positive attitude towards crypto by Goldman Sachs dated back to late November, when former chairman and CEO Lloyd Blankfein stated that it is arrogant to dismiss Bitcoin due to the lack of central authorities governing the asset because there exists a chance that the consensus currency could gain mass adoption.

“A five dollar gold coin was worth five dollars because it had five dollars worth of gold in it. Then they issue paper money that is backed by gold in the treasury. Then one day, they issue paper money that does not have the backing of gold. There was no pledge that if you turn it in, I’ll give you five dollars of gold. It is fiat money. I say this piece of paper is worth five dollars and so therefore it is five dollars and a lot of people did not take that for a long time. But, now they do without question. You move a little bit further and you get bitcoin that is not a fiat currency so I don’t trust, it and I don’t like it. On the other hand, if it works, I say maybe it was a natural progression from hard money to digital money, said Blankfein.

The open-mindedness of Blankfein and his acknowledgement of Bitcoin as a consensus currency with the potential to lead the pathway from cash to digital money has ultimately led the entire banking sector, at least in the US, to become more friendly towards the emerging asset class.

Not All Due to Goldman

Banks generally are pressured to follow the trend and to dismiss services that are of no demand by replacing them with highly profitable ventures. Hence, even if Goldman Sachs had focused the majority of its resources in institutionalization Bitcoin, if institutions had not showed much interest in it, other banks would not consider entering the market.

As Milne suggested, the sudden pivot in the stance of banks towards cryptocurrencies demonstrate the rapid increase in the demand for the asset class from institutions, which possibly could have been triggered by the low price range of most cryptocurrencies.

The post Citigroup, Morgan Stanley’s Roadmap Shows Institutional Demand For Bitcoin is Surging appeared first on NewsBTC.