After years of hovering around the border of the world of cryptocurrencies, major financial firms now seem ready to fully embrace the crypto subculture, writes Alexander Osipovich for The Wall Street Journal.

Last month, Larry Fink, chief executive of BlackRock, the largest asset manager in the world, said that he was a big believer in bitcoin. Several days later, Howard Lutnick, the CEO of Cantor Fitzgerald, said he is expecting to see bitcoin rally this year.

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“Holding a dollar in a token is amazing,” said Lutnick.

These and many other financial firms are now racing to lure Main Street investors into these largely unregulated markets in search of fresh sources of revenue.

The move has been prompted by the recent, heavily anticipated launch of exchange-traded funds which directly hold bitcoin. Proponents of the cryptocurrency are hoping that the ETFs will help boost prices in the digital currency by making it available to a broader investor base.

However, many opponents are wondering if these highly speculative assets should be part of the average individual’s portfolio. Others see Wall Street’s embrace of bitcoin as a thinly disguised attempt to cash in on what is an emerging asset class.

“Fee revenue is the name of the game on Wall Street,” said Lee Reiners, a lecturing fellow in economics at Duke University. “This is a new opportunity to get fees.”

And while most of the major players are changing course on cryptocurrencies, some are still wary, including Malvern-based Vanguard.

The investment behemoth has so far refused to provide access to bitcoin ETFs through its brokerage platform, noting that they do not align with Vanguard’s philosophy of enabling long-term, buy-and-hold investing.

JPMorgan Chase CEO Jamie Dimon has also maintained his personal skepticism of bitcoin, despite the fact that the bank has decided to facilitate trading in BlackRock’s bitcoin ETF.

Bitcoin is a useless “pet rock,” said Dimon. “My personal advice is don’t get involved, but I don’t want to tell any one of you what to do. It’s a free country.”

Fred Hubler, the CEO and Chief Wealth Strategist for Creative Capital Wealth Management Group in Chester Springs, has nonetheless been bullish on crypto since 2017.

“It’s been a hard ride, but the fundamentals offer significant upside possibilities,” said Hubler. “It is risky, but we tend to limit our clients to one to five percent total exposure of network into bitcoin and ethereum.”

Read more about cryptocurrencies in The Wall Street Journal.

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