1 in 5 Financial Institutions Exploring Crypto Trading, Survey Finds

Mass media company Thomson Reuters has found that one in five of its financial services clients is considering trading cryptocurrencies this year.

The firm recently surveyed more than 400 clients on its data and trading platforms, including Eikon, REDI, FXall and Elektron. About 20 percent of these clients were “really interested and actively exploring” launching cryptocurrency trading operations in 2018, the firm’s director of new content initiatives Sam Chadwick told CoinDesk.

Chadwick added:

“The feedback really astonished us a bit.”

According to a press statement, 70 percent of the firms looking into trading plan to begin in three to six months, while another 22 percent aim to start in six to 12 months.

“This is a major change from a year ago,” Neill Penney, Thomson Reuters’ co-head of trading, said in the statement.

Chadwick emphasized the shift in attitudes, telling CoinDesk that a year ago, “as we were engaging customers, none of them had any particular interest in cryptocurrencies.” Clients were instead interested in “the blockchain side of things, smart contracts.”

Interest has since notably shifted towards cryptocurrencies. For example, within Eikon’s foreign exchange category, traffic to the landing page for cryptocurrencies comes second only to the euro, Chadwick said. Thomson Reuters has also supplemented its bitcoin price feed with data for ether, litecoin, bitcoin cash and Ripple’s XRP, as well as bitcoin futures prices and indices from CryptoCompare.

Chadwick says that this rapid expansion beyond bitcoin brings up “the interesting question about altcoins, and how diverse do we go here?”

Some survey respondents said, “we’ll trade anything,” he continued. However, in general, interest concentrated around those coins with larger market valuations. A small number further expressed interest in trading ICO tokens, but “privacy coins” such as zcash and monero had few takers. And a few said they were amenable to trading cryptocurrencies, but only through ETFs or similar instruments.

Chadwick would not name the clients that had expressed interest in cryptocurrency trading, but he said they included large asset managers, hedge funds and “some of the trading desks at some of the largest banks.”

Speculating as to why financial institutions are suddenly interested in cryptocurrency trading, Chadwick said there was “obviously” some correlation with cryptocurrencies’ prices. He added, though, that traditional financial players might be interested in gaining experience with tokenized assets in general, since they anticipate a wave of new instruments such as crypto bonds, blockchain-based equity and tokenized dividends.

“We could start seeing some really, really clever stuff,” he said, adding:

“If these organizations have no competence to trade crypto assets at all, they’ll be locked out of a broad segment.”

Chart image via Shutterstock.