The banking industry accelerates its embrace of Crypto Assets, with institutional investment enthusiasm on the rise.

The crypto assets market has recently welcomed a wave of excitement. A well-known electric vehicle company invested $1.5 billion to purchase Bitcoin, and within just 10 days, it gained $800 million in unrealized gains, surpassing the company's car manufacturing profits over the years. Meanwhile, a software company raised another $1.05 billion through convertible bonds to continue increasing its holdings of Bitcoin. Since last year, the company has cumulatively acquired over 70,000 Bitcoins.

This investment enthusiasm not only reflects institutions' recognition of Bitcoin as a hedge against inflation, but also indicates a shift in the traditional financial sector's attitude towards Crypto Assets. In the past two years, the banking industry has accelerated its embrace of Crypto Assets, paving the way for broader applications in the future.

According to statistics, there are currently 35 banks that have a friendly attitude towards the crypto industry and have substantial business dealings with crypto-native enterprises. Among them, 11 are located in the United States, 10 in Switzerland, and the rest are mainly distributed in financial centers in the UK, Germany, and other European countries. The median assets of these banks amount to $866 million, of which 6 have total assets exceeding $2 billion.

The United States' leading position in the encryption banking industry is attributed to both long-term industry exploration and the open attitude of regulatory agencies. A series of policies released by the Office of the Comptroller of the Currency last year promoted the integration of crypto companies with traditional banks. For example, a certain crypto exchange and payment company was allowed to upgrade its state trust license to a national trust bank license. Regulatory agencies also permitted banks to directly custody crypto assets and even considered using public chains and stablecoins as payment settlement infrastructure in the future.

Switzerland, as another crypto-friendly country, allowed eligible crypto companies to apply for banking licenses as early as 2019 and approved several traditional large banks to carry out Crypto Assets custody services. In Asia, a large bank in Singapore launched a digital asset platform that integrates issuance, trading, and custody, supporting exchanges between various Crypto Assets and fiat currencies.

Aside from the banking industry, an increasing number of publicly traded companies are also starting to allocate Bitcoin. According to statistics, there are currently 19 publicly traded companies in North America and Europe that hold Bitcoin, along with some ETF-like funds, bringing the total holdings to 948,720 coins, accounting for 4.747% of the total Bitcoin supply.

The asset management scale of a large crypto assets fund grew rapidly in 2020, soaring from less than $1 billion at the beginning of the year to $43.626 billion by February 2021. The market expects more competitors to enter this field this year, and the likelihood of the approval of a Bitcoin ETF in the United States is also increasing. Existing crypto assets trust funds have introduced more competitive rates, and Canada has approved two Bitcoin ETFs to start trading.

For listed companies, indirectly investing in Bitcoin through a compliant securities market may become a more prudent choice. With the diversification and compliance of investment channels, it is expected that more institutional investors will enter the Crypto Assets market.