- FTX’s sudden bankruptcy has sown fresh doubt about the crypto industry.
- Most Wall Street firms have executed big crypto and blockchain initiatives.
- Insiders say traditional firms will now look at crypto partnerships more skeptically.
Some of BlackRock’s institutional clients can access bitcoin through Coinbase. Wealth management clients of JPMorgan, Morgan Stanley, and Wells Fargo can buy funds that offer cryptocurrency exposure. Invesco and Galaxy Digital teamed up to launch crypto funds. Fidelity will soon let customers trade crypto, and retirement savers can invest in a Fidelity 401(k) plan with bitcoin in it.
The ties between Wall Street, Main Street, and digital assets have never been tighter. Now these initiatives by traditional banks and money managers will be tested after the giant crypto exchange FTX suddenly filed for bankruptcy this month, weighing on already depressed crypto asset prices and raising questions about the company’s many links across the industry.
While Wall Street insiders say companies aren’t scrapping their plans — which, after all, are part of long-term institutional strategies that executives have in some cases taken years to shape — they expect traditional firms to scrutinize new crypto ventures more than they have in the past.