Standard Chartered Plc is reportedly establishing a trading desk for Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), according to sources familiar with the matter.
What Happened: This move positions Standard Chartered as one of the first global banks to enter the spot cryptocurrency trading arena.
The new crypto desk, which will operate from London as part of the bank's FX trading unit, is close to commencing operations, according to Bloomberg.
Banks such as Goldman Sachs Group Inc. (NYSE:GS) have been involved in trading cryptocurrency derivatives for years.
However, stringent regulations have prevented them from directly dealing in the underlying assets.
The Basel Committee on Banking Supervision has proposed that banks must apply a 1.250% risk weighting to any unhedged crypto exposure, creating significant challenges for profit generation in direct cryptocurrency trading.
In an emailed statement, Standard Chartered commented on its strategic move: "We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability."
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Why It Matters: The news comes as the cryptocurrency market witnessed substantial outflows from Bitcoin spot ETFs on June 20, marking the fifth consecutive day of outflows.
The total net outflow reached $140 million, with Grayscale's (OTC:GBTC) ETF experiencing a single-day outflow of $53.1022 million.
In contrast, BlackRock's (NASDAQ:IBIT) ETF saw a modest single-day inflow of $1.4791 million, bringing its total historical net inflow to an impressive $17.643 billion.
This trend of outflows from Bitcoin spot ETFs underscores the volatility and shifting investor sentiment within the cryptocurrency market.
However, despite these outflows, there is a notable increase in institutional interest and infrastructure development aimed at supporting digital assets.
What's Next: This growing institutional interest and infrastructure development come ahead of Benzinga's Future of Digital Assets event on Nov. 19.
The event is poised to offer valuable insights into the evolving landscape of digital finance and the increasing role of institutional players in the cryptocurrency market.
Image created using artificial intelligence with Midjourney.