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Now that banks can hold Bitcoin, crypto M&A rumors are swirling

July 29, 2020, 4:27 PM UTC

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Crypto entrepreneurs are in a fine mood. Digital currency prices are on a new upswing, while a federal regulator ruled last week that banks can hold customers’ Bitcoin in the same way that they safeguard gold, stock certificates, or other valuables.

The ruling is not just a reputation boost for Bitcoin. Industry vets like Messari founder Ryan Selkis also view it as setting the table for a spate of M&A activity as banks look to buy rather build crypto services. All of this has set off a wave of chatter about who might get acquired.

In my conversations with crypto insiders, one name that came up repeatedly was Anchorage, the app-based custody service cofounded by the charismatic, young Diogo Monica. The startup, people say, is an ideal target for a financial giant looking to add a crypto custody product they could also white label to other banks. Another source of acquisition rumors is BitGo, an older and less buzzy custody service that has been trying to reinvent itself as a full service crypto shop.

Another widely circulating rumor, relayed to me by a well-regarded crypto CEO, is that JPMorgan Chase is in talks to acquire Coinbase. While juicy, this rumor is almost certainly untrue. Yes, the CEOs of the two companies have been meeting since 2018, and JPMorgan is now doing Coinbase’s banking, but that doesn’t mean an acquisition is in the works.

For starters, big banks aren’t in the habit of buying exchanges, crypto or otherwise. It’s also unlikely that Coinbase founder Brian Armstrong, who aspires to disrupt the financial system, would take his company to the cusp of an IPO—only to sell it to a firm that’s synonymous with Wall Street. Those in position to know tell me the rumor is bunk.

As for the broader prospect of banks snapping up crypto firms, much of the excitement may be premature. According to Colleen Sullivan, who runs crypto operations at Chicago trading shop CMT, old-line financial firms will continue to take a go-slow approach to embracing digital currency.

“To think banks are just going to start custodying crypto tomorrow doesn’t make sense,” Sullivan says. The two realms—securing physical assets versus digital ones—are totally different ball games. “It’s not a capacity they have in house,” she says.

That doesn’t mean it’s not going to happen. Sullivan is bullish about the future of crypto in general, including the still nascent decentralized finance, or DeFi, industry. She thinks tie-ups between banks and crypto startups will become common, just not for a while.

Like so much else in crypto, it appears mainstream adoption by big banks is just over horizon.

Jeff John Roberts




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If you’d gone to sleep on Valentine’s Day, and just awoke to see BofA’s still terrific second-quarter numbers for bad loans, you’d never know that the economy was in free fall.

It feels like we're living in an economic Bizarro World. The bad news piles up—mass unemployment, political chaos, out-of-control pandemic—and yet the balance sheets of big banks are all but unscathed.

What's going on? Fortune legend Shawn Tully trains his lens on Bank of America, explaining how a change in accounting rules that forces banks to record likely losses upfront, as well as stimulus measures that have helped borrowers continue to pay, mean BoA is in good position to weather the coming storm. But nobody—including BoA—can predict how bad that storm will be.


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$4.1 Billion

Even though DeFi is a source of incessant chatter for hardcore crypto types, the total value of this sub-sector of the crypto industry is still tiny. All of DeFi is worth just over $4 billion—less than the value of much unloved Bitcoin Cash.


Much of Twitter spent last week goofing on their their professions/passions with Dad-style jokes. We at The Ledger couldn't figure out who started this—if you know, fill us in. In the meantime, here's Box CEO Aaron Levie dunking on Bitcoin:

This edition of The Ledger was curated by Jeff John Roberts. Contact him at