Bank It Up: Why Do Banks Hate Bitcoin?

Bitcoin used to be regarded as a fad. But the world’s first, best known, and most valuable cryptocurrency has demonstrated some staying power.

In July 2010, Bitcoin started trading in a range of about $0.0008 to $0.08 per coin. From this lowly beginning, the Bitcoin price reached an all-time high of over $64,800 on April 14, 2021, and it could climb to $500,000 in 2030.

So the Bitcoin value appears poised to climb to meteoric heights. As Bitcoin has increased in value and importance over the years, banks have taken notice. And they now see the most popular cryptocurrency as somewhat of a threat. 

Read on to find out why banks hate Bitcoin — and about what this means to you as a single mom who might be interested in investing in cryptocurrency.

They Don’t Like In-and-Out Transfers

One reason banks don’t like Bitcoin relates to what cryptocurrency investors tend to do with the large deposits they have in their accounts.

After making large deposits, many investors wire out large amounts to brokerages or wallets in order to convert this money into Bitcoin. Banks dread this because of money laundering concerns.

Banks don’t wish to unwittingly facilitate illegal activity. Some offshore banks have implemented what’s known as an 80/20 rule.

It stipulates that investors have to keep around 80% of the money they deposit into their accounts, so they can only wire around 20%.

They Don’t Like Missing Out on Profits

Another reason banks don’t like Bitcoin is that the cryptocurrency cuts into their profits. The more money that is in customers’ accounts, the more money banks make. That sounds simple enough.

The thing is that when investors send a lot of their cash to their Bitcoin wallets, that money is no longer in bank accounts generating money for banks.

Bitcoin has also drawn some controversy on account of the amount of energy it takes to mine the cryptocurrency. It can be argued, however, that these concerns are overblown. You can find out more at www.bytefederal.com.

They Don’t Like Lack of Transparency

Yet another reason banks don’t like Bitcoin is that there’s a lack of transparency. Specifically, banks are unable to investigate the source of the money that is transferred from crypto wallets into bank accounts.

Banks don’t want to face punishment if, for instance, drug money gets laundered through their networks.

They Don’t Like Compliance Expenses

If you keep up with Bitcoin news, you might already know that one reason banks don’t like cryptocurrencies like Bitcoin is the compliance expense issue.

When Bitcoin investors make substantial deposits, the banks must extensively look into who the beneficial owners of the accounts in question are. Banks also have to ensure that investors are honoring tax rules in their home countries.

Does Bitcoin Make Sense for You?

So what will it be — Bitcoin or bank? The good news is that you don’t have to look at it in terms of choosing a bank or Bitcoin. You can do both. 

Bitcoin investing can be a great option if you’re a single mother looking to diversify your investment strategy. Just make sure you do your research since Bitcoin — as is the case with all cryptocurrencies — is volatile.

Are you interested in reading more content intended to empower single moms who want to boost their income and improve their financial health? Check out more content on our blog.

Bitcoin used to be regarded as a fad. But the world’s first, best known, and most valuable cryptocurrency has demonstrated some staying power.

In July 2010, Bitcoin started trading in a range of about $0.0008 to $0.08 per coin. From this lowly beginning, the Bitcoin price reached an all-time high of over $64,800 on April 14, 2021, and it could climb to $500,000 in 2030.

So the Bitcoin value appears poised to climb to meteoric heights. As Bitcoin has increased in value and importance over the years, banks have taken notice. And they now see the most popular cryptocurrency as somewhat of a threat. 

Read on to find out why banks hate Bitcoin — and about what this means to you as a single mom who might be interested in investing in cryptocurrency.

They Don’t Like In-and-Out Transfers

One reason banks don’t like Bitcoin relates to what cryptocurrency investors tend to do with the large deposits they have in their accounts.

After making large deposits, many investors wire out large amounts to brokerages or wallets in order to convert this money into Bitcoin. Banks dread this because of money laundering concerns.

Banks don’t wish to unwittingly facilitate illegal activity. Some offshore banks have implemented what’s known as an 80/20 rule.

It stipulates that investors have to keep around 80% of the money they deposit into their accounts, so they can only wire around 20%.

They Don’t Like Missing Out on Profits

Another reason banks don’t like Bitcoin is that the cryptocurrency cuts into their profits. The more money that is in customers’ accounts, the more money banks make. That sounds simple enough.

The thing is that when investors send a lot of their cash to their Bitcoin wallets, that money is no longer in bank accounts generating money for banks.

Bitcoin has also drawn some controversy on account of the amount of energy it takes to mine the cryptocurrency. It can be argued, however, that these concerns are overblown. You can find out more at www.bytefederal.com.

They Don’t Like Lack of Transparency

Yet another reason banks don’t like Bitcoin is that there’s a lack of transparency. Specifically, banks are unable to investigate the source of the money that is transferred from crypto wallets into bank accounts.

Banks don’t want to face punishment if, for instance, drug money gets laundered through their networks.

They Don’t Like Compliance Expenses

If you keep up with Bitcoin news, you might already know that one reason banks don’t like cryptocurrencies like Bitcoin is the compliance expense issue.

When Bitcoin investors make substantial deposits, the banks must extensively look into who the beneficial owners of the accounts in question are. Banks also have to ensure that investors are honoring tax rules in their home countries.

Does Bitcoin Make Sense for You?

So what will it be — Bitcoin or bank? The good news is that you don’t have to look at it in terms of choosing a bank or Bitcoin. You can do both. 

Bitcoin investing can be a great option if you’re a single mother looking to diversify your investment strategy. Just make sure you do your research since Bitcoin — as is the case with all cryptocurrencies — is volatile.

Are you interested in reading more content intended to empower single moms who want to boost their income and improve their financial health? Check out more content on our blog.