For many people, the first time they heard about cryptocurrency might have been through headlines about the FTX scandal, battles with the SEC, or its association with the dark web. The truth is that the digital asset sector has earned a reputation for being risky and chaotic, deepening the public’s negative perception of crypto.
However, times are changing. In the last few years, crypto has evolved from a fringe investment to a mainstream asset, attracting significant attention from developers, asset managers, and investors. Under the previous administration and SEC commissioner Gary Gensler, there was a stark contrast between government skepticism and the ever-growing adoption of digital assets, with 26% of American adults investing in crypto due to Bitcoin’s surge to $100K. This stance has already shifted dramatically under the second Trump administration.
Source: NFTeveningIt’s critical that the crypto industry continues the positive momentum under Trump, proving it can be stable, secure, and ready for institutional investment, encouraging those on the fence that potential rewards justify any risks.
A Secure Alternative
In recent times, Bitcoin’s substantial rally has further boosted institutional adoption, with pension funds such as the State of Wisconsin Investment Board and Michigan investing in regulated cryptocurrency exchange-traded funds (ETFs), signaling a cautious but notable entry into the market. Similarly, European Exchange-Traded Products (ETPs) witnessed net inflows of £108 million in November 2024, highlighting an increase in institutional confidence.
Despite this momentum, reluctance persists, with 75% of Americans remaining skeptical about the reliability and safety of crypto investments, according to a Pew Research Center survey. This hesitation stems largely from crypto’s reputation, exacerbated by high-profile collapses like the Terra Luna crash. While traditional finance has faced its share of scandals, many of crypto’s most infamous failures stemmed from centralized entities rather than DeFi protocols, which, if properly structured, could mitigate such risks. Overcoming this perception remains crucial for broader institutional adoption.
Investing in an on-chain asset management platform helps avoid the risks seen in failed crypto projects by using decentralized, transparent systems. Instead of relying on one company or individual to control everything, the use of smart contracts and multi-signature wallets ensures that all actions are secure, clear, and follow set rules. This way, unlike centralized finance organizations, there’s no one point of failure, and investors can trust that transactions are being handled fairly and safely. This setup makes it more appealing for traditional institutions to dip their toes in crypto.
The Finance Industry is Lagging Behind
Finance has always been more cautious with new tech compared to sectors like retail or advertising. While other industries have quickly embraced automation and digital platforms to improve efficiency, security, and customer experience, finance has been held back by tough regulations and the need to maintain trust.
On top of this, many traditional financial institutions are still stuck with outdated technology, which limits their ability to innovate. In 2022, an industry survey revealed that an overwhelming 95% of top global banking executives identified outdated legacy systems as major obstacles to growth. Similarly, a Financial Times report found that 43% of U.S. banks still use COBOL, a programming language from 1959, underscoring the ongoing reliance on legacy systems within the industry.
However, the tide is shifting. In 2024, the momentum for real-world asset (RWA) tokenization was undeniable, with major financial players, including HSBC, JP Morgan, and Goldman Sachs, launching digital asset custody services focused on tokenized securities. With the RWA tokenization market set to hit $50 billion this year, it’s projected to become a trillion-dollar global industry by 2030. But as finance evolves, we need the underlying infrastructure to support it.
2030 Tokenized real-world assets predictions. Source: Tren Finance Research reportDeFi Has the Answer
With major traditional finance organizations considering or actively engaging in digital assets, they should all be contemplating decentralized finance. DeFi has the potential to provide more protection for investors and developers than traditional financial products. Using an on-chain asset management platform gives users control over their assets through private wallets, which helps mitigate the risk of centralized entities – like banks or exchanges – mismanaging or losing funds. This approach also allows fund managers to create custom, permissioned strategies, offering a more personalized form of asset management.
Crypto Is not the Bad Apple it’s Made Out to Be
It’s time to stop letting these past failures define the entire sector. With shifts in regulatory attitudes – like the formation of the SEC’s crypto taskforce and Trump’s increasingly pro-crypto stance – there’s a clear opportunity to turn the page. But to seize this moment, we need to keep pushing for reform and transparency to rebuild trust. Institutional investors, asset managers and developers are clearly eyeing the crypto space, but their hesitation is rooted in its tumultuous history.
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