Why This Deutsche Bank Division Is Gearing Up For A Crypto Investment

According to a report from Bloomberg, banking giant Deutsche Bank is ready to double down on crypto and digital asset. The financial institution will take advantage of the recent downside pressure in the sector to leverage “interesting opportunities,” per a statement from Stefan Hoops, CEO of the DWS Group.

The bank is assessing possible investment in the crypto industry via its asset management arm DWS. According to people familiar with the matter, the financial institution is already locked and ready to inject capital into two German crypto companies.

Crypto Winter Yields Opportunities, Banks Ready To Harvest Them

Bloomberg claims that the Deutsche Bank’s asset management arm could buy a minority stake in Tradias or Deutsche Digital Assets. The latter company operates as a crypto exchange, while Tradias runs a brokerage firm used by prominent clients, including the local authorities and Trade Republic.

Owned by Bankhaus Scheich, Tradias was central in selling confiscated digital assets without spiking volatility in the sector following a request from a Frankfurt prosecutor in 2021. At that time, authorities “cleaned” over $113 million in seized digital assets via the Tradias platform.

Bankhaus Scheich and Tradias committed to continuing cooperating with future investigations. Thus, the company has a good reputation in the country.

In that sense, it seems the likeliest candidate to receive the DWS investment. According to Bloomberg, Hoops and the asset management arm want to improve the firm’s reputation after facing allegations of “greenwashing,” which resulted in a German and U.S. investigation.

Bloomberg claims that Hoops has been a public crypto and digital assets advocate. Under his leadership, the firm has worked on a blockchain and crypto-focused strategy to strengthen its foothold on the nascent asset class.

The asset manager and the financial institution are looking for new opportunities to mitigate recent losses. The report claims the firm saw over 20 billion euros in outflows and a 107 billion euros drop in managed assets since 2022.

These metrics declined because of a global crash across financial markets and a general de-risk sentiment among investors. Thus, the firm is looking to improve investor confidence. Hoops hinted at the firm’s ambitions in the crypto space during an earnings call last week; the report claims:

(…) started to assess strategic partners and commence due diligence on potential targets.