The crypto ecosystem is continuing to develop, despite the market correction and bankruptcies witnessed last year, Bank of America (BAC) said in a note Thursday, following a report that exchange operator Nasdaq (NDAQ) plans to launch a digital asset custody service by the end of this quarter.

Institutional demand is driving the offering of institutional-grade products, with Nasdaq just the latest traditional finance, or TradFi, firm to offer more services in the digital assets space, the report said.

Bank of America says institutional investors remain engaged and focused on the “disruptive nature of blockchain technology over the longer term.”

The bank says it expects crypto company collapses to slow institutional trading as they “reevaluate counterparty risk and ensure that custody, exchange and broker-dealers are separate entities or siloed.”

However, these collapses create a void in the crypto ecosystem that “trusted and experienced TradFi firms offering institutional-grade products may fill,” analysts Alkesh Shah and Andrew Moss wrote.

The U.S. Securities and Exchange Commission’s (SEC) Enhanced Safeguarding Rules could limit the ability of registered investment advisers to provide custody for clients’ tokens on most crypto-native exchanges, which will further drive TradFi institutions into the space, the report added.

“Our view is that TradFi institutions remain the counterparty of choice,” the bank said.


All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP