Bitcoin Becomes the New Favorite of Listed Companies, Banking Industry Accelerates Embrace of Crypto Assets

Tesla's investment in Bitcoin gained $800 million in floating profit in just 10 days, surpassing the company's profits from over a decade of car manufacturing. Meanwhile, MicroStrategy has raised $1.05 billion through convertible bonds to continue purchasing Bitcoin. The company has accumulated over 70,000 Bitcoins since last year.

This enthusiasm not only reflects Bitcoin's safe-haven status in the context of global liquidity easing but also shows the shift in traditional financial institutions' attitudes towards Crypto Assets. In the past two years, traditional banking has accelerated its embrace of Crypto Assets, paving the way for their broader acceptance in the future.

According to statistics, there are currently 35 banks that are friendly to the crypto industry and have substantial business dealings with crypto-native companies. Among them, 11 are located in the United States, 10 in Switzerland, and the rest are mainly distributed in European financial centers such as the United Kingdom, Germany, and Malta. The median assets of these banks are $866 million, with 6 banks having total assets exceeding $2 billion.

The United States' leading position in the encryption banking industry is attributed to its long-term exploration of the crypto industry, as well as a series of executive orders issued by the Office of the Comptroller of the Currency (OCC) last year. These policies have enabled crypto-native enterprises to collaborate more closely with traditional banks.

For example, the payment charter launched by the OCC allows crypto companies such as Kraken, Paxos, and BitGo to convert state trust company licenses into national trust bank licenses. The OCC has also opened a pathway for the U.S. banking industry to directly custody crypto assets, and even allows banks to use public chains and crypto dollar stablecoins as the infrastructure for payment, clearing, and settlement in the future.

Several banking giants have already begun to take action or make statements. A large bank has provided banking services for a licensed exchange in the United States. Another global custodian bank announced that it will launch a new digital asset custody division in 2021 to assist users in trading digital assets, including Crypto Assets.

Switzerland is another noteworthy hub for crypto-friendly banking. In 2019, the Swiss Financial Market Supervisory Authority (FINMA) opened applications for banking licenses to qualified crypto companies and allowed traditional banking institutions to participate. In the same year, FINMA approved several of the country's major traditional banks to conduct crypto assets custody services and issued licenses for banks based on crypto asset businesses.

In Asia, a bank in Singapore has launched an integrated platform for the issuance, trading, and custody of digital assets, supporting exchange services between various Crypto Assets and fiat currencies.

At the same time, more and more listed companies are starting to allocate Bitcoin. According to statistics, there are currently 19 North American/European listed companies that hold Bitcoin, in addition to some "quasi-ETF" funds managing a large amount of Bitcoin. The total amount of Bitcoin held by these institutions reaches 948,720 coins, accounting for 4.747% of the total Bitcoin supply.

It is worth noting that the business of a large crypto assets fund experienced explosive growth in 2020, with assets under management (AUM) increasing nearly 50 times. As of February 20, the fund's AUM has reached $43.626 billion.

The market expects more similar funds to emerge in 2021, and the long-unapproved Bitcoin ETF in the United States may also be launched this year. These new products could offer more competitive management fee rates. For example, a newly launched Bitcoin trust fund has an annual management fee rate of only 1.75%, which is 0.25% lower than a well-known fund.

Two Bitcoin ETFs have started trading in Canada, with the first ETF achieving a daily trading volume of $165 million, attracting the attention of international investors, including those from China.

For listed companies, these emerging financial products undoubtedly provide richer Bitcoin allocation and arbitrage channels. Investing in Bitcoin through fully compliant securities markets may become a more prudent choice for listed institutions.