Crypto firms move funds to asset managers, including Fidelity amid banking turmoil

Source: Fidelity, Instagram

Cryptocurrency firms are moving funds from banks to asset managers as turmoil in global banking continues, but industry insiders don’t see bank failures as the end of banking for the cryptocurrency industry.

The turmoil in the banking sector has so far led to the collapse of three major U.S. banks, with crypto-friendly banks Silvergate, Silicon Valley Bank (SVB) and Signature Bank out of business.

To mitigate further damage to the cryptocurrency industry, some firms are now taking a hard look at where and how they store their funds, according to Bloomberg.

It added that many cryptocurrency firms have found it difficult to find new banking partners following bank failures, and said asset managers — rather than traditional banks — now stand out as a more attractive option for the industry.

According to the report, a growing number of cryptocurrency firms have turned to Fidelity Investments and other asset managers for help, with one cryptocurrency industry executive saying he has recommended about 25 firms to them in the past three days alone. fidelity. Those firms include cryptocurrency market makers and venture capital firms focused on the cryptocurrency industry, he said, adding:

“Fidelity is not a traditional bank, but they are certainly safer than Tier 2 and above banks.”

Cryptocurrencies are ‘incredibly resilient’

According to Tey El-Rjula, co-founder and CEO of cryptocurrency firm FLUUS, the industry will feel the collapse of several crypto-friendly banks, but it is unlikely to cause any major problems.

“It’s important to note that the cryptocurrency industry is incredibly resilient and has shown the ability to adapt to changing circumstances,” El-Rjula said in comments shared with

He added that many other financial institutions are currently developing new types of solutions for the cryptocurrency industry, and as the industry grows, new cryptocurrency entry points will naturally emerge.

El-Rjula also noted that peer-to-peer platforms and decentralized exchanges (DEXs) are growing, which can be seen as a natural progression given the difficulties crypto companies are having in the banking industry, saying:

“These platforms allow users to trade cryptocurrencies directly with each other without the need for a centralized intermediary like a bank.”

Not a plan to “kill crypto”

Berk Ozdogan, head of strategy at cryptocurrency exchange Dexalot, also commented to Cointelegraph, taking issue with the narrative pushed by some in the cryptocurrency community that the banking crisis was somehow part of a plan to kill cryptocurrencies.

“While the closure of SVB, Silvergate and Signature is a setback for the financial services industry, I disagree with the narrative that ‘this is a deliberate killing of cryptocurrencies,'” Ozdogan said in comments Wednesday.

He explained that both SVB and Signature Bank have “much broader” customer bases than Web3 companies, so the claim doesn’t make much sense.

Nonetheless, Ozdogan noted that the collapse of the three banks opened the door for other banks to serve the cryptocurrency industry.

He added that banks with “stronger risk management practices” could now “stand out and grab market share”.

Source of information: Compiled from CRYPTONEWS by 0x Information.Copyright belongs to the author, without permission, may not be reproduced

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