And, all along the way, industry influencers like Elon Musk have been tweeting their enthusiasm about cryptocurrency more broadly.
Fintech stalwarts PayPal and Square — along with mobile stock-trading platform Robinhood — have all made it easier to buy, sell and trade crypto.
Even the market cap of number two crypto, Ether , which has a bigger ecosystem of enterprise applications, is around $400 billion, which is close to Visa or JP Morgan Chase.
Institutions were struggling to understand how to custody, trade and clear and settle crypto transactions in a reliable, compliant way.
Institutional adoption will also accelerate the growth of the crypto derivatives market.
Securities and Exchange Commission Chairman Gary Gensler has also called for regulation in this space and indicated this is on the SEC’s agenda.
Still, institutions have a critical need for the right services and tools.
Multiple companies had raised funding rounds of at least $300 million by August 2021, including Blockchain.com, BlockFi, Fireblocks, Ledger and Paxos.
More broadly, I anticipate altcoins will become more popular as investors seek ways to diversify their crypto portfolios.
Volume will shift away from Bitcoin into the altcoin Ether and is even now starting to shift.
To date, institutions have remained on the DeFi sidelines because counterparties in DeFi transactions are largely unknown.
In most DEXs, LPs do not have to pass compliance checks such as Know Your Customer and Anti-Money Laundering requirements.
And in August 2021, DeFi platform Poly Network lost $600 million to hackers.
Now, crypto exchanges are starting to make moves to protect themselves and tend to partner with qualified custodians to manage custody risks.