BBVA reveals efforts to make its “wealth clients” embrace cryptocurrencies
Philippe Meyer, Head of Digital & Blockchain Solutions at BBVA Switzerland, disclosed at the DigiAssets conference in London that the bank’s private banking division advises wealthy clients to allocate 3% to 7% of their portfolios to Bitcoin, depending on their risk tolerance.
The Spanish lender’s act of offering its wealthy clients the opportunity to invest up to 7% of their portfolio in cryptocurrencies is the latest evidence that some mainstream banks are starting to open up to a sector that was once dismissed due to its risks.
However, regulators continue to caution about the dangers of cryptocurrencies, warning that investors should be prepared to lose all their money possibly. Earlier this year, the European Securities and Markets Authority (ESMA) reported that 95% of banks in the EU do not participate in crypto activities.
BBVA’s reveals efforts to make its “wealth clients” embrace cryptocurrencies
In a statement, Meyer mentioned that they began advising their private clients on Bitcoin in September of last year. Due to the riskier profile accompanying cryptocurrencies, he revealed that BBVA will allow the clients to invest as high as 7% of their portfolios in crypto.
What has driven this sudden shift is that cryptocurrency prices have soared recently, and Bitcoin hit its highest record in May.
That comes after a rebound from the lows recorded in 2022 as a clutch of major exchanges, including FTX, went under and left millions of investors out of pocket. They were aided in the recovery by support from US President Donald Trump’s pro-crypto stance.
While private banks often facilitate crypto purchases at clients’ request, they still rarely go so far as to recommend investing in digital assets actively.
Meyer mentioned at an event that BBVA was one of the first major global banks to recommend that wealthy clients invest in cryptocurrencies. He noted that the bank has fulfilled client requests to purchase them since 2021.
BBVA advises clients to invest between 3-7% in Bitcoin and Ether, but Meyer indicated they plan to include more cryptocurrencies later this year.
Meyer stated that clients have generally responded well to this advice and dismissed fears about the assets being too risky.
“If you look at a balanced portfolio, adding 3% can really improve performance,” Meyer explained. Based on his argument, investing 3% does not involve taking a significant risk.
ESMA raises concerns about the dangers associated with crypto
Earlier, the European Union’s securities watchdog warned that issues in the cryptocurrency industry could threaten the stability of financial markets in the future as the sector expands and its links to more traditional financial markets deepen.
This call for caution from the ESMA follows US economic policies that irritate global markets as US authorities struggle to remove barriers between the crypto and traditional banking sectors.
In a speech to the European Parliament that was shared on the watchdog’s website, Natasha Cazenave, the executive director of ESMA, revealed that EU financial markets face significant pressure due to wider political and geopolitical events.
Additionally, stock markets have been crashing since US President Donald Trump announced a blizzard of new tariffs. This also caused a significant drop in crypto prices. However, asset prices in various markets regained some of those losses.
Following these concerns, Crypto-asset markets are still quite small. To address this, Cazenave mentioned that in today’s market conditions, even problems in these small markets can lead to wider issues in their financial system. She also noted that the risks to financial stability from crypto are not significant at this time.
Still, ESMA raises alarms about the dangers of crypto and states that this sector requires ongoing careful observation.
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Original reporting: cryptopolitan.com
