Traditional banks and exchanges are starting to see less returns than their cryptocurrency counter parts.
Deutsche Bank reported their earnings this morning and they came in a little on the disappointing side.
They reported net income of $146 million USD in Q1 of 2018.
(Source: https://www.cnbc.com/2018/04/26/deutsche-bank-earnings-q1-2018.html)
Even more disappointing when you consider that number was dwarfed by what Binance was able to do in the same quarter.
Binance reported that they made roughly $200 million in their most recent quarter of this year.
(Source: https://www.cryptoground.com/a/binance-records-profit-200-million)
Some Caveats:
Keep in mind that Binance does the most volume of any crypto exchange while Deutsche Bank's business has been in decline for some time now.
In fact, that number was about 80% less than what Deutsche Bank did the year prior.
Also, keep in mind that Binance only did about $7 million in profits in the previous quarter, so it has experienced incredible growth in a very short time while Deutsche Bank has been in decline.
However, this whole comparison outlines something very important in the crypto space...
Current brokerages, banks, and exchanges are actually chomping at the bit to get involved with cryptocurrencies, and why wouldn't they?!
Coinbase reported that they did over a billion dollars in revenue in 2017, with over half of that revenue coming in just the last couple months of 2017.
There is tons of demand to trade these products all over the world.
So, why haven't the Etrade's, the TDA's, and the Scottrade's jumped on and started trading cryptocurrencies as well?
That is the thing, they will, but there is one major speed bump currently in the way for all of these guys.
That speed bump is regulations.
No one really knows what the regulations are going to be for these things so they can't really get involved at this point.
They don't know how the SEC is ultimately going to define a security, a commodity, or a token.
All of this makes for a waiting game for the traditional banks and brokerages.
Once those rules are clear, I think we will see a flood of new entrants in the cryptocurrency exchange business, mainly from those already in the exchange business.
(Source: https://strategiccoin.com/nasdaq-launch-bitcoin-futures-contracts-2018-wsj-report/)
The Nasdaq is already on board:
The Nasdaq said that they would be open to trade cryptocurrencies once there is a clear regulatory framework in place.
They also said they think cryptocurrencies aren't going away, they are going to be around for some time to come.
More about that can be found here:
https://www.cnbc.com/2018/04/25/nasdaq-is-open-to-becoming-cryptocurrency-exchange-ceo-says.html
We are still in the very early innings of this brand new asset class spreading it's wings and eventually becoming mainstream in the investment world.
Stay informed my friends.
Image Source:
https://www.cnet.com/news/binance-offers-10-million-in-bounties-to-catch-hackers/
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