- DWS Group, the parent company of Deutsche Bank wants to invest in smaller crypto companies.
- This investment is one of the firm’s approaches to driving growth and maintaining competitiveness.
German multinational investment banking firm Deutsche Bank AG, through its parent company, DWS Group is looking at placing a bet on crypto-focused firms. As reported by Bloomberg, DWS Group is in talks to take a small stake in Deutsche Digital Assets (DDA), a boutique crypto firm operating out of Frankfurt, Germany.
DDA offers crypto exchange-traded products to its clients, a product that has attained near-maturity in the German digital currency ecosystem. Besides Deutsche Digital Assets, DWS is also looking at inking a strategic partnership with Tradias, a market-making firm owned by Bankhaus Scheich.
Tradias is a renowned crypto startup that has clients spread across different sectors. The company was contracted by regulators in Frankfurt to sell some of its confiscated digital currencies in a way to will stir little or no impact on the market.
Pursuing cross-market relevance
The plans by Deutsche Bank to expand its current reach in the digital currency ecosystem do not come as a surprise. Other mainstream financial services providers are also making a related push into the nascent ecosystem. The German firm is now looking at avenues to stay competitive through targeted diversification according to sources close to the matter.
Its anonymous sources also highlighted that the company is in talks with Galaxy Digital Holdings, the crypto firm owned by the popular investor, Mike Novogratz. Having earned a bad reputation for greenwashing which has drawn probes from regulators in the US and Germany, DWS Chief Executive Officer Stefan Hoops is now looking to help rebrand the company’s image.
While the pivot into the digital currency ecosystem presents a promising future for the company, Hoof will still have to battle the growing scrutiny in the industry. These scrutinies are born as a result of the recent bouts of collapses, most of which were compounded by the implosion of the FTX Derivatives Exchange.
In all, Hoops is riding on his convictions, having been a vocal proponent of crypto and new technologies for transforming regional and global finance. The plans to diversify its approach to investing and cash generation need to be amplified in general.
DWS Group saw its Assets Under Management (AUM) plunge by €107 billion in the 2022 fiscal year while outflows topped €20 billion ($21.5 billion).
How Will Deutsche Bank Investment Plans Affect Bitcoin?
While there have been no direct links to Bitcoin (BTC) acquisition, the investment plans from Deutsche Bank is billed to directly impact the premier cryptocurrency. Should the DDA, Tradias, and Galaxy Digital deals pull through, it can give the firm indirect exposure to Bitcoin in the mid to long-term.
This positive sentiment is good for the digital currency as an investment will imply the partner firms will have more capital with which they can inject into the nascent asset class. Until the plans are confirmed by all the firms, and the capital injection starts rolling in, these projections may be left as speculative.
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