Some of the biggest names in finance are making new bets on cryptocurrencies, adding competition and momentum to an upstart industry that is under increasing pressure from US regulators.
The world’s largest money manager, BlackRock (BLK), wants to start a new exchange-traded fund that would use bitcoin as an underlying asset.
One of the world’s biggest hedge funds, Citadel Securities, is backing a new cryptocurrency exchange along with Fidelity Investments and Charles Schwab (SCHW), two other sizable money managers.
And one of the world’s biggest lenders, Deutsche Bank, wants to operate a crypto custody business that would hold digital assets for its clients.
These endorsements from institutions that have a track record on Wall Street are helping to push the value of cryptocurrencies higher, especially bitcoin (BTC-USD).
The world’s largest cryptocurrency rose to its highest price in a year on Friday, to $31,389, after climbing above $30,000 for the first time since April. Through Friday bitcoin had risen 81% year to date.
Other cryptocurrencies also surged this week, including ether (ETH-USD) and Avalanche’s AVAX (AVAX-USD) token.
The total market capitalization for crypto assets reached $1.2 trillion on Friday, 14% higher than where it stood a week earlier.
This new interest from mainstream financial institutions comes at a time of rising peril for an industry that struggled to regain its footing following the 2022 implosion of cryptocurrency exchange FTX and the regulatory crackdown that followed.
The Securities and Exchange Commission earlier this month filed lawsuits against the biggest crypto exchanges in the US and the world, Coinbase (COIN) and Binance, alleging they both allowed digital currencies to trade on their platforms that should have been registered with the agency.
That stoked new concerns that it could become more difficult to trade certain digital assets. Since the beginning of 2023 the SEC has charged 15 different crypto actors with violating securities laws.
A surprise turnaround in sentiment about the industry started June 15, when BlackRock, which controls more than…