• The fifth-largest bank in the United States has announced the launch of its crypto custody service for fund managers. 
  • Proponents state that institutional crypto adoption is at the low end of a curve that could accelerate the upside. 
  • Organizations like pension funds are the most likely to embrace cryptocurrencies. 

US Bank drives crypto adoption among institutional investors and fund managers with its latest service offering. Institutions in the United States currently have low exposure to cryptocurrencies owing to regulatory hurdles; this is likely to change with the launch of crypto custody services. 

Experts predict that institutional adoption in crypto will skyrocket

United States' fifth largest retail bank, US Bank, offers a Bitcoin custody service to fund managers. The offering entails storing private keys for Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC). 

Gunjan Kedia, Vice-Chair of US Bank's wealth management and investment services division, states that support for Ethereum and other cryptocurrencies will be added over time. 

Kedia states, 

Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class. I don't believe there's a single asset manager that isn't thinking about it right now.

There is a higher percentage of institutional investors interested in cryptocurrencies when compared to 2020. Proponents in the cryptocurrency ecosystem expected China's crypto ban to stifle institutional adoption and result in a drop in these numbers. 

Interestingly, Asia's cryptocurrency transaction volume has increased by over 700% since 2020. Despite the ban on cryptocurrencies in China, crypto adoption is on the rise. 

The top three Asian countries leading the wave of cryptocurrency adoption are India, Pakistan and Vietnam, utilizing peer-to-peer monetary systems. 

Chainalysis' 2021 Global Crypto Adoption Index (GCAI) evaluated 154 countries based on on-chain cryptocurrency value received, on-chain retail value transferred and peer-to-peer exchange trade volume. Chainalysis is a leading blockchain intelligence platform. The results are shown in the chart below.
 

Chainalysis' 2021 Global Crypto Adoption Index

Chainalysis' 2021 Global Crypto Adoption Index metrics.

US Bank is not the first financial or banking institution to launch crypto-related services in the United States. Key players in custody banking, Bank of New York Mellon, State Street and Northern Trust, have announced their plans to support custody of cryptocurrencies. 

US Bank's service is currently limited to institutional managers in the United States or the Cayman Islands. While cryptocurrencies were created to embrace decentralization, fund managers' clients are looking for custody from established banking and investment giants like US Bank. 

Katie Stockton, the founder and managing partner at Fairlead Strategies LLC, believes that cryptocurrency adoption is in its early stages. Stockton states, 

We're at the very low end of that curve that could accelerate to the upside.

Stockton believes that pension funds have not explored cryptocurrencies as an investment instrument yet and that allocating even a fraction of their assets could result in significant gains. This makes pension funds the ideal client for cryptocurrency fund managers and institutions. 

Charlie Silver, CEO of Permission.io, believes that cryptocurrency will become an asset class for institutions. Silver was quoted saying,

I have no doubt that crypto will become a true asset class on par with equities, bonds, real estate, and precious metals.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin price action over the last 72 hours indicates that a massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. 

More Bitcoin News

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic (LUNC) price witnessed a massive spike on Friday, after yielding 12% gains overnight. The move came after the world’s largest crypto exchange, Binance announced it would be burning 6.39 billion LUNC tokens. 

More Luna Classic News

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance’s native token BNB suffered a 3% decline in response to the $5 million exploit on DeFi protocol Ankr Protocol. The BNB chain-based protocol confirmed that it has fallen victim to a multi-million dollar exploit. 

More Binance Coin News

Cardano price gets underpinned, could move 10% north before New Year

Cardano price gets underpinned, could move 10% north before New Year

Cardano (ADA) price action is trading in more quiet waters as the spillover effects and aftermath of FTX and BlockFi bankruptcies are finally easing into the background. 

More Cardano News

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

A massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. In this weekly forecast, we will take a look at Bitcoin’s monthly performance for the last decade and determine if this bullish outlook is possible. 

Read full analysis

BTC

ETH

XRP