"Based on my understanding, it will be possible to have your bank account and crypto wallets in one place."

According to Kraken, they will offer these services in the first year of operations:

• Digital asset custody
• Demand/deposit accounts (DDAs)
• Wire transfer and funding services.

Another exciting part to all of this is the insurance side. The US FDIC insures depositor’s money up to $250,000. However, BTC is a little different because it significantly fluctuates in value, unlike the dollar. So a more sustainable way to insure BTC custody, is to buy BTC, and hold BTC on their books, essentially matching bitcoin for bitcoin.

Lloyd's of London announced a new product this year:

“It is a new type of liability insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed asset even if this fluctuates over the policy period.”

Now they do not say whether they hold BTC on their balance sheet, but global insurers are in the business of protecting from risk and exposure, and to have an insurance policy with a dynamic limit, needs to have an asset that dynamically mirrors bitcoin, hence bitcoin. And that is a lot of buying pressure on BTC. The same could be said for insuring any other digital asset. Stablecoins could also play a role.

Nothing exists in a vacuum, and I know that I'm leaving out a great deal of possibilities. But there is a notable feedback loop effect to insuring crypto. For every BTC held in custody, there will be a BTC bought and held on institution's balance sheets. And with any asset, the more demand, the higher the price, everything else being equal.

Fantastic post @crypto.piotr!