Coinbase has gone public, and it looks like Wall Street and some of America’s largest and most prestigious banks are feeling the heat. The popular cryptocurrency exchange began trading its new stock last Wednesday on the Nasdaq, letting the financial world know that it was here to stay, and that cryptocurrency is going to continue to attract the attention of investors.
Banks Are Really Feeling Pressure as of Late
For the most part, cryptocurrencies and banks have not always seen eye to eye. Banks, for example, are centralized financial entities, meaning they control the financial products that standard citizens have access to. They decide who can use their products and services usually by looking at their customers’ backgrounds (such as their job and credit histories). From there, the banks decide if the person they are examining is trustworthy enough to be part of its monetary family, and if it decides otherwise, the individual must look elsewhere.
Cryptocurrency, by contrast, is largely a decentralized industry designed to give financial independence back to the people. It is built to provide people with control over their financial futures, and thus remove the middlemen from several equations. People do not need long and established job histories to take part in the pleasures of digital currency. Rather, they just need a wallet and an internet connection.
Naturally, banks are worried about crypto taking over given that the more the space grows, the closer financial institutions become to being null and void. For the most part, these banks never really took crypto seriously until about four years ago. During that time, bitcoin first began experiencing one of many future spikes, and it was in that year that the world’s number one digital asset would jump to nearly $20,000, which was a new all-time high.
One crypto analyst who remains anonymous said the following regarding banks’ relationships with digital assets:
They never really took bitcoin or Ethereum seriously until the prices started to explode in 2017-18. Then the crash happened, and they forgot about it again, but then they soared in 2020 and have kept on coming. Traders in banks’ dealing rooms are now getting asked by clients, ‘Can’t you help me invest in this stuff?’
Jumping in Early Would Have Been Good
Now that Coinbase is being publicly traded, there is a good chance many banks are thinking they missed the bandwagon and should have jumped into the crypto space when they had a chance. One ex-banker with Barclays – also anonymous – explained in an interview:
We had a division looking at blockchain [the technology that underpins crypto] in 2014 at Barclays. We were trying to work out how we could use it to run our operations. It was not that we were not on it or aware of it, but it would have meant replicating our entire operation – a massive change, and all for a technology that was just moving too fast.