Wall Street Eyes Crypto Boom as Trump Signals Regulatory Shift
Major Wall Street banks, having previously stayed on the sidelines, are plotting strategies to capitalize on the growing crypto industry, buoyed by President Donald Trump's embrace of the sector.
Morgan Stanley, previously absent in the crypto space, is actively pursuing potential clients for initial public offerings (IPOs). Bank of America executives are exploring ways to facilitate deals for digital asset firms. Royal Bank of Canada is also looking to expand its crypto presence after its first crypto deal late last year.
Banks are eager to forge deeper ties with crypto companies to avoid missing out on opportunities presented by the more relaxed regulatory environment under Trump, who has self-proclaimed himself the "crypto president." Gemini, Bullish, Circle Internet Financial, and Kraken are among the crypto firms considering IPOs.
Morgan Stanley, RBC, and Bank of America declined to comment.
Trump's executive order on digital assets and the establishment of a Securities and Exchange Commission task force on crypto have created a more favorable atmosphere for the industry, potentially unlocking a wave of delayed IPOs.
To date, crypto firms have primarily relied on a diverse group of lenders for capital raising, with larger investment banks remaining selective. Coinbase Global Inc., currently the most prominent publicly-traded crypto company, worked with Goldman Sachs, JPMorgan, Allen & Co., and Citigroup for its much-anticipated direct listing in 2021.
Other active banks in crypto deals include Jefferies Financial, Moelis & Co., and Cantor Fitzgerald. Morgan Stanley assisted Coinbase with selling convertible bonds last year and is keen to participate in future IPO waves.
RBC has recently arranged a convertible bond sale for Core Scientific Inc., indicating an increased interest in the space. Despite its conservative approach, RBC is selectively ramping up its efforts in crypto.
Amidst optimism for the sector, banks are compiling lists of potential crypto IPO candidates. HSBC Holdings has appointed a senior FX strategist as its head of digital assets research.
Bank of America is also heating up conversations about crypto, with CEO Brian Moynihan expressing confidence in the bank's ability to capitalize on transactional opportunities once regulations are established.