The price of Bitcoin (BTC) has risen by 5% in the last 24 hours and is currently trading at USD 9,600 after reaching a daily high of USD 9,664. The overnight increase in BTC coincides with an unexpected decision by the Office of the Comptroller of the Currency (OCC).
On July 22, the OCC said that banks in the U.S. can maintain crypto-currencies. Basically, it gave the green light to bank operated cryptomoney custody services.
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One day after the announcement, the cryptomoney market increased. Along with BTC, Ether (ETH) also experienced a substantial recovery, as the price rose by 12%.
Is Bitcoin’s pricing reacting to the OCC’s decision?
In a formal statement, OCC Acting Comptroller Brian Brooks said that banks could serve „tens of millions of Americans“ by supporting the custody of cryptosystems.
„From safe deposit boxes to virtual vaults, we must ensure that banks can meet the financial service needs of their customers today. This view makes it clear that banks can continue to meet the needs of their customers to safeguard their most valuable assets, which today for tens of millions of Americans includes cryptomoney.
Indeed, this has opened the floodgates for banks to enter the crypto market and provide their customers with tools to invest in crypto currencies.
Throughout 2020, a steady increase in institutional inflows into Bitcoin has continued to drive the crypt-currency market upwards.
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In the second quarter of this year, Grayscale said it processed a $905.8 million entry to its cryptomoney products. The firm, which operates the Grayscale Bitcoin Trust, recorded total revenue of $1.4 billion in Q1 and Q2.
Bank-administered cryptomoney custody solutions could be an alternative to existing regulated Bitcoin investment vehicles. Investors may be interpreting this new development as optimistic, as it means that more reputable and institutional investors could potentially invest in the cryptomoney market in the long term.
Peter Van Valkenburgh, director of research for the non-profit organization CoinCenter, said:
„Accepting that centralized entities for the custody and storage of cryptomonies are inevitable and essential, then it is excellent news that, thanks to the new policies of the OCC, there will be even more competition to provide these services. Domestic banks coming into the game are expanding that competition and may also allow more traditional institutional investors to operate with cryptomonies.
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It’s possible that the OCC’s unexpected announcement has led to an abrupt increase in demand for the major cryptosystems.