July 11th, 2023
The annual Point Zero Forum in Zurich brought together experts and industry leaders to discuss the future of the crypto industry, with a particular focus on institutions. Kaiko’s Head of Portfolio & Innovation, Christel Younes, and Director of Research, Clara Medalie, took to the stage to participate in two engaging debates.
Both Christel and Clara won their debates against speakers from Polygon Labs, Solidus Labs, Genesis Block Advisory, and more. The debates were moderated by René Michau, Global Head of Digital Assets at Standard Chartered.
Debate 1: If We Burn All the Bridges, Can the Chaos Still Cross?
This session addressed whether the crypto industry needs traditional finance to survive. Clara took the affirmative side, emphasizing the need for institutional bridges to fuel and support the growth of the crypto industry. Her core arguments were as follows:
- Crypto Needs Traditional Payment Systems to Grow: It is impossible to burn bridges with fiat currencies, as the vast majority of crypto activity leverages dollars, whether through stablecoins or direct dollar trading pairs. Clara cited Silvergate and Signature as examples, showcasing how their fiat payment networks played a significant role in supercharging the 2021 bull market. These traditional payment networks enabled hundreds of institutional investors and traders to seamlessly access crypto markets, highlighting the necessity of fiat in the current financial landscape.
- Institutional Crypto Services Empower the Industry: Clara emphasized the significance of institutional crypto services in empowering the industry. She pointed out that structured products, such as the Blackrock ETF, play a vital role in providing institutional investors with avenues to participate in the crypto market. These services not only enhance market liquidity but also foster credibility and trust among traditional financial institutions. By catering to institutional investors’ needs, the industry can gain broader acceptance and drive further growth.
- Blockchain Tokenization Experiments for Adoption: Clara discussed the potential of blockchain tokenization experiments in driving mainstream adoption. Tokenization has the power to revolutionize various industries. By tokenizing assets and making them more accessible to a wider range of investors, blockchain technology can facilitate greater adoption of cryptocurrencies and the underlying infrastructure.
Debate 2: How the Institutions Will Actually Come
During Christel’s session, the group debated the significance of four roadblocks to institutional adoptions:
- The need for regulatory clarity.
- The need for wholesale market infrastructure.
- The need for common standards, both technical and best practice.
- The need for trust.
Christel argued that trust is the single most important roadblock for institutional adoption. Without trust, the industry will fail to gain regulatory approvals, a global and diverse user base, and most importantly, institutional adoption of blockchain technology.
Learn more about Kaiko’s data services here, and subscribe to our research here.
