Traditional financial institutions, long wary of crypto, are helping it go mainstream

ProShares and Mastercard, 2 institutions tied to the traditional financial infrastructure, are helping crypto go mainstream.

Over the past few weeks, we’ve seen a few interesting updates in the cryptocurrency space:

Traditional financial institutions, long wary of crypto, are helping it go mainstream
  • ProShares, a financial services firm that offers a variety of exchange-traded products (and has $54B+ under management), launched the 1st exchange-traded fund* (ETF) based on bitcoin futures.
  • Mastercard announced a partnership with digital wallet app Bakkt that will let banks issue debit and credit cards that earn crypto rewards, per The Wall Street Journal.

Both efforts aim to make crypto more accessible

The ProShares ETF allows investors to get exposure to bitcoin without having to use crypto exchanges. Investors are already flocking to the concept:

  • The ETF brought in $550m on its 1st day, one of the largest 1st day totals on record for an ETF
  • A similar fund, Valkyrie Bitcoin Strategy ETF, launched 3 days later

The Mastercard partnership with Bakkt…

…could accelerate crypto adoption in a couple of ways:

  • Cards powered by Bakkt will allow customers to pay merchants with cryptocurrency by converting the crypto into a currency the merchant accepts and executing the transaction over Mastercard’s network.
  • The partnership will also allow banks to issue cards that offer crypto rewards rather than traditional points programs.

BlockFi, a popular cryptocurrency exchange and wallet, launched a credit card with bitcoin rewards earlier this year — but Mastercard, with 2.8B cards in circulation, could bring crypto rewards to a much wider audience.

Not everyone is jumping on the hype train

Earlier this month, Michael Burry — a hedge fund manager and subject of “The Big Short” who predicted the housing market collapse — wrote a now-deleted tweet asking how to short cryptocurrency.

Additionally, Nassim Taleb, author of The Black Swan, recently argued that bitcoin is a Ponzi scheme.

The crypto bulls claim these critics are blinded by their identification as “bears” and have underperformed the market for the past 13 years… ouch.


* Exchange-traded fund (ETF): A type of investment fund that trades on a stock exchange and gives investors exposure to a particular asset (e.g., indexes, sectors, commodities). For example, one of the most popular ETFs of all time is the SPDR S&P 500 ETF Trust, which mirrors the S&P 500, and gives investors exposure to the entire index.

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