Crypto companies are moving their cash from banks to asset managers in the wake of the turmoil in global banks. But the industry insiders described the situation as harmless as they do not see a potential threat to the crypto sector.
So far, the turmoil has adversely affected three major American banks including crypto-friendly banks like Signature Bank, Silvergate, and Silicon Valley Bank.
This financial crisis has, directly and indirectly, affected many major businesses and locals, and to mitigate further damage, particularly in the crypto industry, several big companies are reportedly looking hard in finding a better place to store their funds.
A source close to the situation said that in light of the bank collapses, many crypto companies have been finding it difficult to spot new banking partners. According to them, asset management firms appear to be more suitable in the situation rather than going for a traditional bank to store their cash.
In addition to it, the source added that crypto companies have been reaching out to financial service corporations like Fidelity Investments, and other asset managers in large numbers. Here the crypto companies refer to the companies that do engage in business with cryptocurrencies, crypto market makers, and venture firms.
Per the report, one of the crypto industry executives has disclosed that he alone has referred Fidelity to 25 individual companies in the last three days. He further asserted that although “Fidelity is not a traditional bank,” it is still a safer option that prevails in the industry.
According to the crypto executive, Fidelity is better than any “tier-two and beyond banks.”
Meanwhile, the CEO and co-founder of the crypto-ramping company FLUUS, Tey El-Ruja opined that although the failure of various crypto-dealing banks would hit the industry hard, It probably won’t be a big problem in the near future.
“Crypto industry is incredibly resilient,” El-Ruja said in a statement. He asserted that the industry is quite flexible and therefore it can adapt to necessary changes happening around. According to him, the crypto industry will naturally grow when new-on ramps to the crypt emerge.
As an example, he incited several other financial institutions that focus on finding new types of solutions to the sector.
El-Ruja also noted the fact that P2P platforms like decentralized exchanges (DEXs) have been undergoing natural development, which can also be applicable to crypto companies. More importantly, he highlights the point that such platforms encourage “to trade crypto directly” from one person to the other, without relying on an “intermediary like a bank.”
While all these discussions have been going on, there are a number of crypto users who according to Dalton’s Head of Strategy, Berk Ozgoden, are shedding their sweat in connecting the lines between crypto’s smooth running and its prevention.
Currently, there is a large number of people who are somehow moved by the thought that the authorities have been making plans to choke crypto, whereas, no such discussions have been officialized from the side of the crypto managers.
In conjunction with this, Ozgoden said in a Wednesday comment that he is far from thinking about the setbacks in the financial service sectors like Signature, SVB, and Silvergate, having anything to do with the intentional choking of crypto.
He elucidated his supposition by revealing the fact that the banks which collapsed in the last two months were not just engaged in Web3 firms, but their business was much wider in that sense. Therefore the allegations made no sense to him at all.
But Ozdogan has opened a new ray of hope by hinting at the possibility that banks other than those three in the financial crisis, can open their business to serve the crypto industry. If that is something to go by, then there will be no noticeable hindrance in the crypto industry although the current situation demands so.
El-Ruja finally added that it is a golden opportunity for financial institutions with relatively “stronger risk management practices” since the market is currently open and ready to accept the change. If those banks are willing to take ahead, he asserted that they will “excel and grab market share” in no time.
Although crypto is currently going through a state of uncertainty, this situation will not prolong for a long time, and many crypto advisories have claimed that the current drop in the financial sector will not affect the crypto industry like how the investor fear and the condition is getting quiet handy day-by-day with the emergence of Fidelity and other asset managers into the scenario.