Cryptocurrency Deposits at Metropolitan Commercial Bank Drops by 50%
Metropolitan Commercial Bank has in the past year experienced a steady decline of deposits emanating from businesses in the crypto-verse. This is an indication that the bank is now witnessing more competition than it did a few years ago. It’s a scenario that was unimaginable three years ago when the commercial bank was only one of the few players in town.
Two years ago, the lender, who is based in New York reported that its deposits from the crypto-verse had reduced by 52%, to total a hundred and four million dollars by the close of business on 31st Dec 2018. This is according to information that was presented to its investors in the past week.
The investor presentation also noted that by the end of the year, clients in the crypto market accounted for 4% of the commercial banks’ total deposits. This means that the bank had lost a lot of business as a year earlier, deposits from the same clients were at 13%.
Banks Servicing the Crypto Industry
Metropolitan Commercial Bank is among very few banks that have been openly servicing the crypto market. In the investor presentation brief, it was clear that the commercial bank still advertises a broad array of global payment clients, which includes leading cryptocurrency payments processor Bitpay, crypto brokerage Voyager, crypto-asset platform Crypto.com, and Coinbase, the crypto brokerage company.
Nonetheless, the brief also noted that the Metropolitan Commercial bank had been doing quite well from the 2nd quarter of 2018. This was at a time when the deposits coming from its crypto clients were averaging three hundred and sixty-nine million dollars. Even though this decline can partly be blamed on the 2018—2019 bear market, it also means that the bank is today facing stiffer competition than before.
It also happens to be a field where many traditional banking institutions have been wary of treading. According to Christopher O’Connell,
“Rather than fight to retain deposits, Metropolitan was likely content to let some of this business go.”
The last year has also seen some new players enter the market, such as Quontic Bank in New York and Provident Bank.