20 percent of financial firms such as banks and hedge funds are looking to trade cryptocurrencies soon, survey finds

  • One in five financial firms, ranging from hedge funds to the biggest banks, are considering trading digital currency in the next three to 12 months, according to a new Thomson Reuters survey published this week.
  • Of those that showed interest, about 70 percent said they were planning to trade in the next three to six months.
  • The news is a sign of improving sentiment and should be "very positive" for bitcoin prices, Brian Kelly, founder and CEO of BKCM, says.
A collection of bitcoin, litecoin and ethereum tokens.
Chris Ratcliffe | Bloomberg | Getty Images
A collection of bitcoin, litecoin and ethereum tokens.

This could be the year cryptocurrency trading gains momentum within financial firms, including hedge funds and trading desks at Wall Street's biggest banks, according to a new survey.

One in five firms are considering trading digital currency in the next three to 12 months, according to a Thomson Reuters survey published Tuesday. Of those that showed interest, about 70 percent said they were planning to trade in the next three to six months, and 22 percent said they would look to trade crypto in 6 to 12 months.

"Cryptocurrency is still a relatively small part of the trading market, but this survey indicates this niche segment is starting to enter the mainstream of the financial services industry," Neill Penney, co-head of Trading at Thomson Reuters, said in a press release. "This is a major change from a year ago."

Thomson Reuters surveyed more than 400 clients across its trading solutions, which included hedge funds, large asset managers, and trading desks at the biggest banks. The results showed a widespread familiarity with cryptocurrencies, Thomson Reuters said.

The investor survey results and news Monday that Wall Street giant Goldman Sachs made its first hire for cryptocurrency markets are boosting prices this week, according to Brian Kelly, founder and CEO of BKCM.

"In the last month we have seen Goldman and Barclays publicly acknowledge they are planning to trade cryptocurrency. That has everyone on notice that institutional money is ready to enter the market," Kelly said. "This should be very positive for prices."

Bitcoin surged to its highest level in more than a month Tuesday, extending the post-Tax Day rebound to a high of $9,337.66 Tuesday, according to CoinDesk. The cryptocurrency is coming off its worst quarter ever and fell 48 percent in the first three months of 2018.

Much of the sell-off this year was blamed on investors selling to meetU.S. tax obligations, regulatory scrutiny, and major tech companies banning advertisements for cryptocurrencies.

In a note to clients Tuesday, Kelly predicted a new resistance level of $12,000 for bitcoin. Kelly recently backed venture capitalist Tim Draper's call for the cryptocurrency to hit $250,000 within four years.