Major banks such as JPMorgan Chase, Morgan Stanley, and Goldman Sachs are building dedicated teams for cryptocurrencies and blockchain technology. This trend is not limited to the US alone; financial institutions worldwide are increasingly embracing digital assets. The institutionalisation of Bitcoin is further facilitated by the anticipated approval of Bitcoin ETFs by the SEC, which is expected to significantly boost institutional confidence and funding in the cryptocurrency space.

However, this trend towards institutionalisation is not without its critics. Concerns have been raised about the potential for corporate monopolies to exert outsized influence and control over the Bitcoin market. The fear is that these corporations, with their vast resources and lobbying power, could shape the rules of the game to their advantage, potentially undermining the decentralised ethos that underpins Bitcoin and other cryptocurrencies.

Regulatory bodies, such as the SEC, are also playing a significant role in shaping the future of Bitcoin. The SEC has been increasing its oversight of cryptocurrencies, taking enforcement actions to prevent fraud, reduce market manipulation and force more disclosure of relevant information to investors and cryptocurrency holders. This increased regulatory scrutiny is seen by some as a sign that the institutionalisation of Bitcoin is becoming more accepted and mainstream. Regulatory action is likely to squeeze out non-compliant, non-institutional players in Bitcoin through enforcement, deterrence and especially increased costs of compliance.

As the industry looks to leave behind the problems it experienced during 2023, a new paradigm is emerging. The crypto industry isn’t courting financial institutions as it once was. It doesn’t need to. Global banks and industry giants are actively seeking digital assets solutions to satiate client demand for efficient, transparent and on-demand financial services.