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There is demand for cryptocurrency advice amongst high net worth individuals.
Maerki Baumann, a Zurich-based private bank, has announced that it will manage the cryptocurrency assets of clients. It is the second Swiss private bank to do so.
The bank has published an article on its website entitled “Cryptocurrencies – What exactly are they?” It was written by Milko G. Hensel, Deputy Head of IT and Digitisation.
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In the article, Hansel explains the basics of what cryptocurrency is and goes over a few of the most popular coins. He concludes by advising clients against any major investment in the asset class.
According to the editorial, the institution is “generally prepared to accept funds generated through cryptocurrencies,” whether raised through speculation, mining or as payment for services rendered.
However, Hansel clarifies that as an institution it has no present plans to invest. This is because it “currently only has limited empirical data and information to call upon (prices, volatility, trading volumes).”
Hansel added: “Generally speaking, however, we would advise against any major investment in cryptocurrencies at present. In our view, cryptocurrencies are unsuitable for long-term investors due to the uncertainties set out above.”
Maerki Baumann, est. 1932, is a family-owned bank that primarily offers investment advice and asset management for institutional clients. It manages 646.3 million CHF ($649,037,080) in client assets, according to its 2017 financial report.
Interestingly, it is advising its customers to consult with Bitcoin Suisse, which is a cryptocurrency consultancy firm.
Bitcoin Suisse is a business partner of Falcon Private Bank, which was the first private bank to accept cryptocurrency. It announced in August 2017 that it was prepared for Ethereum, Litecoin and Bitcoin Cash, and it even set up a Bitcoin ATM in the lobby of its headquarters.
Falcon Bank handles 4.6 billion CHF in client assets and has locations in Abu Dhabi, Dubai, London, and Luxembourg.
That same month, Falcon poached the CIO of Maerki Baumann, hiring him as chief strategist. Maerki Baumann CEO Stephan Zwahlen said at the time: “We take this opportunity to discuss the future positioning of our investment area. Based on that we will decide on an appropriate replacement.”
Private banks cater to high net worth individuals. Maerki Baumann is clearly not enthusiastic about offering this new service, so must be doing it due to client demand.
This can be seen as a continuation of the trend of big money people and institutions adopting cryptocurrency as part of their portfolios. Switzerland, in particular, is a good country to observe this.
For example, the owner of the country’s main stock exchange announced in July that it is building a cryptocurrency trading desk. The Swiss Digital Exchange is planned for launch next year and will operate under the supervision of the national financial regulator.
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