Are Bitcoin Startups Bound to Crush the Banks?

By June 12, 2015Bitcoin Business
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Are Bitcoin Startups Bound to Crush the Banks?

Bitcoin Startups are getting into every sector of the financial business, and the banks know it. Online businesses have been threatening the banks, and now a massive wave of Bitcoin startups are innovating the financial sector up to the point that banks needed to act.

Personal-finance startups are helping consumers balance their checkbooks online. Refinancing startups are taking advantage of cheap debt to offer students better rates on loans; on the other hand, all these new startups are introducing an innovative and more simplistic approach for the financial business industry.

All of it is taking a lot of the business away from banks. The biggest firms on Wall Street have been employing all sorts of tactics to defend their top line from invasions coming from new technologies such as Bitcoin.

But now we are seeing a new turning point. Many big banks are now investing in startups. Increasingly, seed-stage ventures and accelerators have been formed as Wall Street firms snap up a piece of hundreds of pre-IPO companies.

Wells Fargo has backed a handful of startups through its accelerator. One has the potential to help big banks get slimmer on staffing. Kasisto is a platform for financial institutions providing clients virtual personal assistants. And Bank of America has sponsored tech accelerators in New York, London, and Charlotte.

Sometimes banks wind up jointly investing in the same startup, like Motif Investing, an online broker. Both JP Morgan and Goldman Sachs backed that platform. JP Morgan also backed Square, along with numerous big banks’ investment arms. And even Morgan Stanley, which has had a relatively muted presence in the investing scene, has struck deals to back companies like messaging platform Perzo and Eris Exchange. Goldman Sachs also backed Square, along with other big startups. Other deals for the bank have included Kensho, a market data analytics firm. Goldman is even backing Bitcoin startups.

It seems that Banks are now looking towards earlier stage investments and opportunities; they cannot risk being left behind. Technologies such as Bitcoin are seen has innovations that can bring up a lot of potential to the financial industry and this time, the Bitcoin Industry and the Blockchain technology has finally caught their interest.

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Personal-finance startups are helping consumers balance their checkbooks online. Refinancing startups are taking advantage of cheap debt to offer students better rates on loans; on the other hand, all these […]

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