Recently, a cryptocurrency craze has swept through American Wall Street investment banks. Banks on Wall Street, which had previously been critical of cryptocurrencies, are now releasing cryptocurrency-related products one after another.
On the 13th (local time), The New York Times (NYT) reported that "just a short while ago, bank executives were competing over who could criticize cryptocurrencies more strongly, but now large banks cannot stop talking about cryptocurrencies."
According to NYT, during investor conference calls, public presentations, and meetings with Washington regulators, Wall Street bank executives are competing to announce new plans related to cryptocurrencies, such as developing new cryptocurrencies within their banks or launching loans tied to digital assets.
In fact, at the end of last month, JP Morgan Chase, the largest bank in the U.S., announced a partnership with the cryptocurrency exchange Coinbase to allow customers to top up their Coinbase wallets or purchase cryptocurrencies using credit cards starting this fall. Additionally, starting next year, customers will be able to exchange reward points accumulated based on credit card usage for the stablecoin USDC, linked to the U.S. dollar.
This change contrasts sharply with the attitudes of Wall Street banks, which had once taken the lead in criticizing cryptocurrencies. JP Morgan Chase's Chief Executive Officer (CEO) Jamie Dimon previously compared Bitcoin to "a pet rock" and argued that the entire cryptocurrency industry should be banned. Bank of America CEO Brian Moynihan has also criticized Bitcoin as "an untraceable money laundering tool."
The shift in Wall Street banks' stance on cryptocurrencies is due to President Donald Trump's crypto-friendly approach. Since taking office in January, Trump has pursued pro-cryptocurrency policies, which have led the U.S. House of Representatives to pass cryptocurrency-related bills, including the "Genius Act," which incorporates stablecoins into the regulatory framework.
The surge in cryptocurrency prices, fueled by Trump's pro-cryptocurrency policies, has also driven changes among Wall Street banks. The price of Bitcoin, the representative cryptocurrency, first surpassed $100,000 in December last year after Trump's election, followed by $110,000 in May and $120,000 last month.
Some predict that the price of Bitcoin could reach $150,000 by the end of this year. This is due to President Trump signing an executive order on the 8th that allows cryptocurrencies to be included in 401(k) retirement accounts, among other policies aimed at revitalizing the cryptocurrency industry.
NYT analyzed that "considering that President Trump and his family are avid cryptocurrency supporters and investors, there is a significant amount of political opportunism at play in the changes among Wall Street banks," adding that "during the past year, as Bitcoin has more than doubled and surpassed $100,000, the traditional financial sector's old jealousy towards the tremendous wealth amassed by companies and investors once treated as fringe has also influenced this change."
However, there are concerns within Wall Street that a rapid shift to cryptocurrency could pose risks. NYT reported that if dollars flow into cryptocurrencies like stablecoins instead of consumer bank accounts, it could reduce the deposits available for mortgage or corporate loans.