After years of caution, some of Wall Street’s largest banks are now gearing up to deepen their involvement in the crypto industry. Fueled by President Donald Trump’s embrace of digital assets, these banks are positioning themselves to capture a wave of initial public offerings (IPOs), share sales, and convertible bond deals that may follow.
Banks Enter the Crypto Space
Morgan Stanley, which has traditionally avoided a significant presence in the cryptocurrency space, is now actively courting potential clients for initial public offerings (IPOs). Similarly, Bank of America executives are reportedly discussing ways to facilitate deals for digital asset firms. The Royal Bank of Canada (RBC) is also looking to expand its crypto business after successfully completing its first crypto deal late last year.
These banks are seeking to establish deeper connections with crypto firms in anticipation of more favorable regulations under President Trump, who has been vocal about his support for the industry.
Trump’s Crypto-Friendly Policies Spark Optimism
During his presidential campaign, Trump promised to make the United States the “crypto capital of the planet.” Since taking office, he has worked to reverse regulations that had been imposed during President Joe Biden’s administration. One of his first moves was to issue an executive order focused on digital assets. Additionally, the US Securities and Exchange Commission (SEC) has formed a task force on crypto, led by Hester Peirce, a long-time advocate for the industry.
David Sacks, the White House’s crypto czar, is also exploring the feasibility of creating a national Bitcoin reserve, further fueling optimism in the sector.
Potential Surge in IPOs
Trump’s regulatory overhaul is expected to unlock a wave of IPOs that had been delayed for years due to government crackdowns on the crypto industry. Previously, many banks had been hesitant to get involved in crypto deals because of regulatory scrutiny. This hesitation was compounded by requests from regulators for additional information or to pause ongoing crypto activities.
The most high-profile public crypto company to date is Coinbase Global Inc., which went public in 2021 through a direct listing. Notably, investment banks like Goldman Sachs, JPMorgan Chase, Allen & Co., and Citigroup worked on Coinbase’s direct listing.
Competition Among Banks for Crypto Deals
While some of the largest investment banks have been selective about getting involved in the crypto space, others are increasingly eager to jump in. Jefferies Financial Group Inc., for example, is advising Bullish, a cryptoasset exchange, on its potential listing, alongside JPMorgan. The firm is also working with Figure Technologies Inc. on an IPO.
Morgan Stanley, which was not involved in the Coinbase transaction, assisted the cryptocurrency exchange in selling convertible bonds in 2023. The bank is now positioning itself to be a part of any future crypto IPOs.
In 2023, RBC helped arrange a convertible bond sale by Core Scientific Inc., a crypto mining firm. Since the 2024 election, RBC has seen a notable increase in Bitcoin and crypto issuers coming to market. While it had previously taken a more conservative approach to crypto, the Canadian bank is ramping up its efforts to compete in the space, though it plans to remain selective with clients.
Broad Optimism and Growing Interest
Banks are developing lists of potential crypto IPO candidates amid growing optimism about the future of the digital assets market. Bitcoin recently reached a record high, and its performance has boosted investor confidence in the broader cryptocurrency industry.
Other signs of increased interest in crypto are emerging, such as HSBC Holdings appointing a senior foreign exchange (FX) strategist as the head of digital assets research, signaling a broader shift toward embracing crypto-related opportunities.
Bank of America’s Strategic Focus on Crypto
At Bank of America, discussions around crypto are heating up as executives prepare for more deal activity. The bank is eager to capture a share of the lucrative fees generated by crypto-related transactions. Bank of America’s CEO, Brian Moynihan, stated in a CNBC interview that banks would “come in hard on the transactional side” once clearer regulations are established.
“We know how to enter the field,” Moynihan explained. “From the transactional side, I think you’ll see the bank industry make moves.”
The Future of Wall Street and Crypto
As the US crypto landscape evolves under Trump’s leadership, Wall Street banks are positioning themselves to play a prominent role in the crypto industry’s next phase. The expected surge in IPOs, share offerings, and other capital-raising activities presents an opportunity for banks to profit from this emerging market.
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