The 'long bitcoin, short the bankers' era is officially over as TradFi giants embrace digital assets

Two major financial institutions, each managing over a trillion dollars in assets, have recently approved cryptocurrency products, signaling a significant shift in the traditional financial landscape. Bitwise CEO Hunter Horsley remarked that these moves demonstrate large firms expanding crypto access even during a bear market, stating that everyone is now working for crypto.

Horsley highlighted that financial institutions of such size did not introduce crypto products during the 2022 downturn, contrasting the current scenario. Bitwise chose not to disclose the specific firms or provide further details on the approvals or client access timelines. However, Sygnum Chief Investment Officer Fabian Dori emphasized the profound change in the relationship between banks and crypto, asserting that the old "long bitcoin, short the bankers" sentiment has vanished.

Dori attributed this shift to client demand and clearer regulatory rules, describing it as a structural development rather than a cyclical one. Notable early entrants among banks include Swissquote, DBS, and BBVA, with BNY Mellon and Nubank also making headway in 2022 and 2023, respectively. St.Galler Kantonalbank, Santander, and Zürcher Kantonalbank followed in 2023 and 2024, respectively, while Standard Chartered, Charles Schwab, SoFi, and Morgan Stanley joined the fray in recent times.

Anchorage Digital's CEO, Nathan McCauley, noted that large financial firms are increasingly partnering with specialized providers instead of developing their own infrastructure. Despite the expansion, crypto's dependence on market prices remains unchanged, as per Sygnum's Dori, who emphasized that institutionalization adds infrastructure to crypto's inherent, narrative-driven trading dynamics rather than replacing them.