- BNY Mellon, State Street, JPMorgan Chase and Citi will offer custody next year, Galaxy Research said.
- A favorable regulatory environment will provide banks with a path to conservation.
- The four banks hold more than $12 trillion in assets under management.
Analysts predict that the world’s four largest banks will begin offering cryptocurrency custody in 2025.
According to Galaxy Research, the Office of the Comptroller of the Currency (OCC) will create a pathway for the world’s four major custodial banks to offer digital asset services.
These are BNY Mellon, State Street, JPMorgan Chase and Citi. Collectively, they hold more than $12 trillion in assets under management.
This would signal an almost complete acceptance of the cryptocurrency industry as a legitimate asset for traditional finance. Even if 1% of the capital of these four banks were invested in crypto, this would result in a market capitalization much higher than what it is today.
With such an institutional push, Galaxy predicts that it will only be a matter of time before nation states start contributing.
2% or more
BlackRock sent shockwaves by telling investors to treat Bitcoin like Apple or Amazon.
The asset management giant said an allocation of 1-2% was reasonable.
But so far no major companies have followed through. Next year will be different, Galaxy Research said.
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“At least one of the major wealth management platforms will announce a recommended Bitcoin allocation of 2% or more,” the analysts said.
Non-aligned nations
After corporate adoption comes nation-state adoption.
Many discussions around a Bitcoin strategic reserve have focused on the United States.
Indeed, crypto experts are whispering in Donald Trump’s ears to start buying Bitcoin on behalf of the US government – even though some Bitcoiners think it’s a bad idea.
However, according to Galaxy Research, the US government will be left behind in 2025.
“Competition among nation states, particularly non-aligned countries, those with large sovereign wealth funds, or even those opposed to the United States, will lead to the adoption of strategies to exploit or otherwise acquire Bitcoin,” the analysts said.
Returning season
Although Bitcoin hogs the spotlight, Galaxy analysts predict that Ethereum will make a strong comeback in the coming year.
They predict that the ETH/BTC ratio, which measures the value of Ethereum relative to Bitcoin, will fall below 0.03 in 2025 before rebounding above 0.06 by the end of the year.
Since Ethereum moved to proof-of-stake during the 2022 “Fusion” upgrade, the ratio has steadily declined as Bitcoin has progressed. The 0.06 level has not been seen since mid-2023.
Galaxy Research also claims that new regulations could increase the value of Ethereum, especially for decentralized finance applications.
“The expected regulatory changes will uniquely support Ethereum and its application layer, particularly DeFi, reigniting investor interest,” they wrote.
Crypto market players
- Bitcoin is down 1.8% over the past 24 hours to $94,170.
- Ethereum lost 0.6% over the same period to $3,330.
What we read
Pedro Solimano is a markets correspondent based in Buenos Aires. Do you have any advice? Send him an email to psolimano@dlnews.com.
