Historically, institutions have been hesitant to jump into the chain due to regulatory risks. However, with Bitcoin ETF asset inflows on track for exceed With gold ETFs’ assets under management in a year, financial and technology companies exploring the technology and offering crypto products, and companies adding digital assets to their balance sheets, institutional interest in crypto is growing. has never been higher. That said, until now, the coexistence of off-chain and on-chain capital has primarily involved using on-chain capital to capture off-chain returns (e.g., Tether purchasing billions of dollars of US Treasuries). With regulatory clarity, we are now in the early stages of moving capital off-chain to on-chain. Post-election developments, like BlackRock and Franklin Templeton expanding their tokenized currency funds to new chains, illustrate the significant capital ready to enter DeFi and are likely just the tip of the iceberg. And beyond tokenization, Stripe recently acquired stablecoin startup Bridge, McDonald’s in partnership with the NFT Doodles project, and PayPal is using Ethereum and Solana to settle contracts. This streamlines asset management, improves market efficiency and liquidity, improves financial inclusion and ultimately accelerates economic growth. The clarity of the regulations will add an accelerator to this already booming activity.
