Earlier today, Bloomberg reported that Standard Chartered Plc is on the verge of launching a trading desk for Bitcoin and Ether.
Standard Chartered is a major international banking group with a unique focus on emerging markets in Asia, Africa, and the Middle East. Founded in 1969 from 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 comparatively limited footprint in Europe and North America, which aligns with its strategic emphasis on high-growth economies.
Headquartered in London, Standard Chartered operates through a network of over 1,000 branches and offices across more than 60 countries. The bank provides a wide range of services including personal and business banking, corporate and institutional banking, wealth management, and trade finance. It is particularly known for its expertise in trade finance, cash management, and foreign exchange, areas that are critical for businesses operating in international markets.
According to the Bloomberg report, this development positions Standard Chartered as one of the pioneering global banks to enter the spot cryptocurrency trading market. Bloomberg’s sources, who requested anonymity due to the sensitive nature of the information, reveal that the new crypto desk is poised to commence operations imminently. The news agency reports that this innovative trading unit will be integrated into the bank’s existing foreign exchange trading division, with operations centered in London.
While Bloomberg notes that banks like Goldman Sachs Group Inc. have been active in cryptocurrency derivatives trading for some time, it emphasizes that stringent regulations have historically prevented these institutions from directly dealing in the underlying crypto assets. The news outlet points out that the Basel Committee on Banking Supervision’s proposed 1,250% risk weighting for unhedged crypto exposure has presented significant challenges for banks seeking to generate profits in this space.
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 this 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.
Bloomberg’s article highlights Standard Chartered’s increasing involvement in the crypto sector, noting the bank’s ownership stakes in two crypto firms, Zodia Custody and Zodia Markets. These firms offer a range of services from custody to over-the-counter trading, further solidifying the bank’s position in the digital asset space.
There was also mention of Standard Chartered’s launch of Libeara, a blockchain unit aimed at assisting institutions in tokenizing traditional assets. Bloomberg says that this unit is currently supporting the creation of a tokenized government bond fund using the Singaporean dollar, showcasing 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 by CoinDesk, based on an emailed investment note sent 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 Bitcoin’s current situation 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 US could have a similar transformative effect on Bitcoin’s value, akin to what gold ETFs did for gold. This comparison is used as a basis for their medium-term Bitcoin price projections.
The investment note stated, “We think the gold analogy – in terms of both ETF impact and the optimal portfolio mix – remains a good starting point for estimating the ‘correct’ BTC price level medium-term.” According to the bank’s projections, if spot ETF inflows reach their mid-point estimate of $75 billion, or if reserve managers begin purchasing BTC, Bitcoin’s value could potentially surge to $250,000 in 2025.
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