HSBC wants its clients to remain at distance with anything that even remotely smells like Bitcoin.
The European banking giant, notorious for laundering money for drug kingpins and Ponzi schemers, told one of his clients that he could not buy or purchase MicroStrategy (Ticker: MSTR) stocks via their investment portal. A Nasdaq-listed firm, MicroStrategy operates as a business intelligence agency but has lately forayed aggressively into the Bitcoin market by buying $2.26 billion worth of BTC in multiple rounds.
The firm now holds more than 80 percent of its assets in bitcoin, making itself one of the only Wall Street firms to have massive exposure to the cryptocurrency markets. Its CEO Michael Saylor also promotes bitcoin as an alternative store of value to cash among corporates.
So it appears, HSBC does not like that one bit. The banking mogul, which holds around $2.7 trillion worth of assets under management, told its client that it has “changed the policy on virtual currencies (such as Bitcoin, Ethereum, and other digital currencies) and products related or referencing the performance of virtual currencies.”
Microstrategy has earned 141 percent profit from their bitcoin investment alone. The 91,000-plus BTC they own is worth $5.3 billion at current valuation. HSBC’s decision is directly affecting the company and keeping their clients from obtaining and holding Microstrategy shares.
Author’s Note on HSBC’s Future Direction
HSBC is an establishment with a long history and set traditions. Thus it’s not too surprising they would take the conservative approach toward cryptocurrencies, and bitcoin in particular.
The cryptocurrency is highly volatile, and HSBC remains a low-risk venture. Moreover, in the past year, HSBC, like many other European and American banks, had seen a drop in the value of their shares on the market. On the other hand, MicroStrategy has won big, as have other companies all in on crypto.
But this is not simply an issue of traditions versus innovation. It is an issue of overstepping boundaries when it comes to the client’s desire or need to hold shares of a crypto-associated company.
Has HSBC adopted a winning strategy when it comes to cryptocurrencies? It is not considering the rapid expansion of the crypto market cap, which is close to hitting the $2 trillion mark already, which is not slowing down any time soon. Stepping away from this innovation might cost HSBC not only their clientele but also big profits in the future.