The relationship between Wall Street and cryptocurrency has long been one of cautious curiosity. Once dismissive of digital assets as speculative novelties, major financial institutions are now rolling out crypto-related services at an accelerating pace. Yet beneath this wave of institutional adoption lies a deeper skepticism — one rooted in risk, regulation, and fundamental questions about value.
So, are these banks genuinely embracing crypto — or simply responding to client demand while keeping their distance?
The Shift: From Skepticism to Strategic Involvement
"Most financial institutions, especially on Wall Street, still view cryptocurrency as a commodity, not a financial asset," said Wang Shengzu, Co-Head of Investment Strategy for Asia at Goldman Sachs Private Wealth Management, during a media briefing on May 20.
According to Wang, the core issue lies in custody and risk hedging. Cryptocurrencies lack the structural mechanisms that allow traditional assets to be evaluated, secured, and insured. This makes it difficult for banks to assess upside potential or downside exposure — a critical hurdle in institutional investing.
Despite this, client interest is surging. And where demand grows, financial services follow.
Early Movers: BNY Mellon, JPMorgan, and Morgan Stanley Lead the Charge
BNY Mellon Paves the Way
In February, BNY Mellon — the oldest bank in the U.S. — announced plans to offer cryptocurrency custody and transaction services. Shortly after, it participated in a Series C funding round for Fireblocks, a leading digital asset custody platform.
CEO Todd Gibbons framed the move as inevitable: "We’ve seen a significant increase in client interest and demand for cryptocurrencies. We want to be the bridge between traditional and digital assets — it’s a natural evolution."
Though still in its early stages, the service is expected to launch by late 2025, marking a symbolic shift: even legacy institutions can no longer ignore crypto.
JPMorgan Enters with Caution
In March, JPMorgan filed documents with the SEC for a crypto-linked equity note — a structured product tied to a basket of 11 stocks selected by the bank. These companies either hold substantial crypto reserves or operate in blockchain-related sectors.
While the news excited crypto enthusiasts, analysts note that JPMorgan isn’t betting on Bitcoin itself. Instead, it’s catering to investors seeking alternative exposure — without taking on balance sheet risk. The returns (or losses) are fully borne by investors.
Interestingly, some JPMorgan strategists had already allocated around 1% of client portfolios to crypto earlier, citing inflation hedging across asset classes like equities, bonds, and commodities.
But make no mistake: this isn’t an endorsement. It’s a response to market demand — wrapped in risk-controlled packaging.
Morgan Stanley Opens the Door
By April, Morgan Stanley confirmed it was offering Bitcoin exposure to wealth management clients through two private funds. These are accessible only to high-net-worth individuals with at least $2 million in investable assets — or institutions with $5 million or more.
The bank caps Bitcoin allocations at 2.5% of an individual’s net worth, reflecting its cautious stance.
CFO Jonathan Pruzan acknowledged growing client interest during the Q1 earnings call: "If demand continues, we’ll expand our offerings — always in coordination with regulators."
This measured approach underscores a broader theme: Wall Street isn’t leading the crypto charge. It’s following — carefully.
The Fence-Sitters: Citigroup and UBS Weigh Their Options
Not all giants are jumping in.
Citigroup has signaled interest but remains non-committal. In early May, Itay Tuchman, Global Head of FX at Citi, told the Financial Times that demand from large clients has surged since August. The bank is exploring crypto trading, custody, and financing — but ruled out proprietary trading.
“We’re not rushing,” Tuchman said. “We’ll enter when we can deliver value to clients and meet regulatory expectations.”
UBS offers a more conflicted picture. While internal reports suggest the bank is studying ways to offer crypto access to wealthy clients — fearing customer attrition if it doesn’t — it also issued a stark warning days later.
On May 19, UBS declared that cryptocurrencies are speculative assets, not currencies. It cited volatility, regulatory uncertainty, and operational risks as key concerns — advising investors to avoid crypto exposure altogether.
This contradiction reveals the tension within many banks: Should we offer crypto to keep clients — even if we don’t believe in it?
The Newcomer: Wells Fargo Steps Into the Arena
On May 20, Wells Fargo Investment Institute President Darrell Cronk announced plans to develop an actively managed crypto strategy for high-net-worth clients — potentially launching as early as June.
“Cryptocurrency is an evolving asset class,” Cronk said. “With maturation comes legitimacy. We now see it as a viable investment option.”
This marks a dramatic reversal from December 2024, when Wells Fargo stated it wouldn’t recommend Bitcoin due to lacking infrastructure for holding digital assets.
Now, it’s building that infrastructure — driven by shifting client expectations and market dynamics.
👉 See how institutional strategies are reshaping crypto investing — and how you can stay ahead.
What Do Wall Street Banks Really Think About Crypto?
Behind every service launch is a common justification: client demand. But what do these institutions truly believe?
Wang Shengzu offers clarity: even Goldman Sachs’ dedicated crypto team doesn’t signify full endorsement. The bank provides advisory services and fund-based access — but stops short of advocating crypto as a core financial asset.
Why?
- No intrinsic valuation model – Unlike stocks or bonds, there’s no widely accepted way to determine fair value for Bitcoin.
- Hedging challenges – Institutions can’t easily hedge crypto exposure due to limited derivatives and settlement inefficiencies.
- Custody limitations – Clients rarely hand over private keys. Without control, banks can’t use crypto as collateral — unlike equities or real estate.
- Speed and scalability – Blockchain transaction speeds remain slow compared to traditional payment rails.
- Decentralization ≠ efficiency – The lack of central oversight creates regulatory gaps and operational friction.
“Cryptocurrency cannot replace existing payment systems,” Wang concluded. “I believe more in central bank digital currencies (CBDCs) led by sovereign authorities.”
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👉 Explore how the next phase of institutional crypto adoption could impact your investment strategy.
Frequently Asked Questions (FAQ)
Q: Are major banks investing their own money in cryptocurrency?
A: Generally, no. Most banks are providing services or products that allow clients to gain exposure — without putting their own capital at risk.
Q: Why are banks offering crypto if they don’t fully trust it?
A: Client demand is the primary driver. Wealthy investors want access, and banks risk losing business if they don’t adapt — even if they remain skeptical.
Q: Can I buy Bitcoin directly through my bank?
A: Not yet widely. Most offerings are indirect — such as crypto-linked notes or private funds — rather than direct ownership of digital assets.
Q: Is cryptocurrency considered a legitimate asset class by Wall Street?
A: Progress is being made, but many still classify it as a speculative commodity rather than a traditional financial asset due to volatility and regulatory uncertainty.
Q: How much crypto can I invest through my bank?
A: Limits vary. For example, Morgan Stanley allows up to 2.5% of net worth in Bitcoin via approved funds — reflecting conservative risk management.
Q: Will banks start offering crypto savings accounts or lending?
A: Not in the near term. Regulatory and custody hurdles remain too high for mainstream retail offerings.
The era of institutional crypto engagement has arrived — but it’s defined more by pragmatism than conviction. As Wall Street builds bridges to digital assets, investors should watch not just what banks offer, but what they believe.