DBS is the world’s first bank to deliver a crypto exchange

If you recall a few weeks back, a leaked document from DBS revealed intentions to release a couple of crypto products, namely an exchange trading platform, a tokenisation offering, as well as custody services. At the time, they quickly took the page down, citing that they have yet to receive regulatory approval. Well, yesterday, they announced that they’ve gotten approval, and will launch these products as soon as next week! In fact, they will be the world’s first bank to deliver a crypto exchange platform.

As South East Asia’s largest bank, they have led the way, and essentially thrown the gauntlet down, not just within the region, but across the world, in showing how a bank can move fast and drive the blockchain environment, and be involved in the narrative of what’s quickly becoming the emerging way we interact with financial products.

2020 has been an amazing year in terms of institutional adoption for crypto, and bitcoin in particular, as companies like Grayscale, MicroStrategy, Square (and via Cash App) and PayPal blazed a path for all other institutions to come into the space.

Many European banks have also been given the green light to purchase and custody bitcoin on behalf of their clients.

DBS’s move will no doubt cast a spotlight in the APAC region, and pushes the narrative of institutional funds on the sidelines waiting to pile in in 2021.

Bitcoin supply crisis

As these funds and companies with deep pockets start dipping their toes into bitcoin, we’re seeing new supply being gobbled up like never before.

In fact, Grayscale and PayPal’s purchases alone are outstripping new supply of bitcoins minted on a daily basis. Grayscale’s bitcoin AUM currently top USD$10B, or over 2% of total supply of BTC.

While we’ve seen an encouraging number of companies, hedge funds and macro investors coming round to the idea of investing in bitcoin, we’re still super early in this wave. Next year will see a continuation, and in fact, probably an acceleration of this trend.

At this point, it is a riskier move to not be exposed to bitcoin, than it is to be exposed to this surging asset.

Bitcoin vs Gold

Bitcoin is also being seen as the new gold standard, and millennials and the next generation will likely favour holding bitcoin over gold in their portfolio. Gold has served us well for thousands of years as a store of value, but so have horses as a means of transportation before cars came along.

Jim Cramer, in a conversation with Anthony Pompliano, also compared gold as an asset to a typewriter in today’s world. Has its functions, but largely obsolete.

But don’t take my word for it. JP Morgan says gold will suffer because of bitcoin.