It's been a big week for Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), with both coins seeing prices rebound after a sustained period of decline.
In the latest development, one of the "big four" accounting firms has announced that it will be investing in both Bitcoin and Ethereum. The Canadian arm of KPMG revealed that it has allocated funds to its corporate treasury to invest in crypto assets.
This move is an example of more traditional financial institutions entering the market. But, are ASX banks keeping crypto at arm's length?
First, let's read why KPMG is taking a chance on Bitcoin and Ethereum.
Mature crypto assets become too big to ignore
Yesterday, KPMG Canada announced a first-of-its-kind investment for the firm with an investment in the two largest cryptocurrencies by market capitalisation.
According to the release, the investment comprised of Bitcoin, Ethereum, and carbon offsets to counteract the emissions of the transactions. The accounting firm allocated the funds using Gemini's execution and custody services.
While the addition of crypto to its balance sheet suggests a positive sentiment, cryptocurrency advocates might be wondering why it took so long. Bitcoin has now been in existence for around 13 years.
In explaining, KPMG's managing partner of advisory services, Benjie Thomas, said that the decision to invest in Bitcoin and Ethereum is based on maturity as an asset class.
Crypto assets are a maturing asset class. Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to crypto assets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving crypto assets.
Adding:
This investment reflects our belief that institutional adoption of crypto assets and blockchain technology will continue to grow and become a regular part of the asset mix.
Furthermore, the decision was made following an in-depth evaluation by the firm. This included a complete risk assessment considering regulatory, reputational, tax, and accounting implications.
Are ASX banks getting involved with Bitcoin?
Financial institutions in Australia are also approaching cryptocurrencies with a more open mind in the last few months.
Surprisingly, the Commonwealth Bank of Australia (ASX: CBA) — Australia's largest bank — announced plans to unlock crypto investments to its customers in November 2021. In addition, the feature would be enabled through its partnership with Gemini, a regulated crypto exchange.
However, CBA is not the only ASX bank to be taking Bitcoin and its crypto peers more seriously. Remarks from Nigel Dobson, banking services portfolio lead at Australia and New Zealand Banking Group Ltd (ASX: ANZ), indicate the potential for another major bank to enter the fray.
Dobson highlighted that the market had become too big to ignore. Although — at this stage — no ASX-listed banks have added cryptocurrencies to their balance sheets.
At the time of writing, Bitcoin is up 2.7% in the last 24 hours to A$61,706. Similarly, Ethereum is trading 2.5% higher at A$4,410.
