Xapo, Bitcoin Start-up, just recently made an announcement that the industry leader – Larry Summers, Former US treasury secretary, John Reed, Former CEO of Citibank and Dee Hock, Visa founder have joined the Xapo bandwagon as the advisory board members.
This news is a clear indication of how seriously Wall Street is taking Bitcoin. This may seem especially surprising to those who seemed who are diligently following Bitcoin’s decline.
Last Year looked bad for Bitcoin
With the turn of last year, every time bitcoin was mentioned in the news, it was mostly for some bad reason. Since December, bitcoin’s value had fallen steeply, around 56% and also beat Russian Rouble Hyrvnia of Ukraine as worst performing currencies of 2014. Earlier this year, publications highlighted this downfall with a statement that people are losing faith in the digital currency. Columnists even considered it to be on its death bed.
News is Greatly Exaggerated
Now that the banking world has started to take interest in the virtual currency, bitcoin’s death may seem overstated and farfetched. Only last fall, two major banks began using software created by Ripple labs whose core product, cross-border payments, is supported on Bitcoin technology. Another start-up, CoinBase that preserves people’s bitcoins, said that they received $75 Million from interested investors that also included NYSE, former Citigroup CEO Vikram Pandit, Tom Glocer – former CEO of Thomson Reuters and Spanish Bank BBVA.
The Road Ahead
According to Cesares, Co-founder and CEO of Xapo, banking institutions may not be able to directly invest in risky initiatives. However, through tech start-ups they are able to gain access to products and services that they otherwise may not develop. He also states that some institutions are curious about the technology while some find the exchange between two parties without third party validation interesting. There are also that are keen to know how Bitcoin eliminates counter party risk from the transaction. There are also some asset managers who built their client’s speculative portfolio based on Bitcoins.
In a nutshell
When Bitcoin hit a rocky patch last year, it was anybody’s guess that it will die an untimely death. However, what critics didn’t see how some of the most powerful institutions of the world get intrigued by the workings of bitcoin. This is the interest that the start-ups and investors are hoping will help bitcoin to survive and prosper.