In the past week, bitcoin had reclaimed the crucial level of $11,000; buoyed by stronger buying volumes. Last week, the research and data firms, noted a large spike in bitcoin transaction volume, but noted that the increased volume was not flowing to exchanges. Their educated guess at the time was that it was possibly an over the counter (OTC) buyer deal.
Some big companies revealed that they had purchased an additional amount of bitcoins for their capital reserve (ranging in millions). Given the large purchases made by some of the large companies, the spike in transaction volume in bitcoins were noted.
Additionally, leading cryptocurrency exchange, Kraken, today announced that they have been approved by the State of Wyoming to become the world’s first Special Purpose Depository Institution (SPDI), i.e. the first crypto firm to become a US bank, tentatively called "Kraken Financial."
The new entity will offer Kraken clients in the U.S. the ability to deposit USD and custody digital assets at a regulated state-chartered bank with several future services in the pipeline designed to appeal to institutions.
The first “Crypto Bank” is yet another foundational brick on the pathway leading institutional money like registered investment advisors (RIAs) to the front door of bitcoin and other digital assets.
In particular, Kraken notes that one of their future services will be digital asset “staking.” Staking provides token holders a yield as compensation for depositing, i.e. staking, their tokens in the ecosystem to secure the network. For example, per Staking Facilities, the staking asset Cosmos ($ATOM), has a current yield of 10% per annum.
Interestingly, many experienced people noted earlier in the past that the attractive yields in digital assets were beginning to draw the attention of large RIAs given the low interest rate environment. However, there are rumors that, there are a lot of issues fiduciaries would face using some of the existing platforms...
Despite the sentiment, Kraken’s bold move may pave the way for more reputable brands to eventually offer crypto friendly banking services like custody and staking. If so, these financial juggernauts would likely bring a tidal wave of buying demand for bitcoin and staking assets with them.
Bitcoin has had a strong week with bullish developments seemingly at every turn, but several obstacles remain, principally brand recognition for traditional asset managers. However, if even a fraction of the above comes to fruition, bitcoin will receive an incredible price boon.
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