At the recent Money20/20 conference in Amsterdam, David Schwed, COO of Halborn, expressed his relief at the presence of established financial institutions like JP Morgan, Citibank, and Goldman Sachs. As big banks increasingly explore the crypto industry, Schwed, and other experts see a significant market opportunity for traditional finance to enter the space.
While crypto’s decentralized and anti-establishment nature may attract some, Schwed believes that the sector will see a shift as regulators tighten their grip. As more robust regulations emerge, leading crypto companies will adapt, learn from ongoing lawsuits, and evolve their business models accordingly.
Industry veteran Kevin O’Leary predicts a changing of the guard within three years, with today’s top exchanges giving way to a new generation of firms capable of integrating with the global financial system. These evolving sentiments coincide with recent developments, such as BlackRock’s bid for America’s first spot-based Bitcoin ETF and major Wall Street players like Fidelity, Charles Schwab, and Citadel Securities entering the crypto market.
BlackRock’s decision to retain Coinbase as the custodian for its Bitcoin ETF, despite Coinbase facing legal action from the SEC, further demonstrates institutional confidence. This move has also garnered sympathy from traditional finance, with the Committee on Capital Markets Regulation criticizing the SEC for hindering crypto firms from registering.
Large institutions like BlackRock lend legitimacy to crypto as an investable asset class and incentivize other financial players to take emerging asset seriously. However, this increasing institutional involvement has sparked concerns among crypto purists, who fear a takeover by traditional finance.
Nevertheless, experts working with these institutions believe Wall Street’s entry into crypto is necessary for the industry’s mainstream adoption. They argue that for crypto to make its mark globally, it must surpass its hardliner and anarchist base. The current phase represents only the second step out of ten on the path toward wider acceptance.
As traditional financial institutions make their foray into the crypto market, the landscape is bound to undergo significant transformation. While some may view this transition with skepticism, it presents an opportunity for increased adoption and integration of cryptocurrencies within the global financial system.