The short answer is that Bitcoin is already at a market value of $450B without sitting in the mainstream of the capital markets system. Institutional investors such as endowments, pension funds, sovereign wealth funds and other allocators such as wealth managers and RIAs (like Verum Partners) have a very hard time allocating to Bitcoin. Many are not allowed to buy it and most everyone can’t access it at the traditional custodial platforms. There are not many good answers. Hedge funds are starting to dip their toes into the water, but it wasn’t until this year that famous hedge funds managers such as Paul Tudor Jones and Stan Druckenmiller each blessed the idea of owning Bitcoin. Coinbase goes social users tout crypto Earlier this week, Karapetsas posed a question to Lido, Coinbase and other major stakers. If regulators demand they censor Ethereum transactions, would they comply? Or would they exit the staking business to “preserve network integrity,” forfeiting billions of dollars in the process?
At this point, use of cryptocurrencies is largely limited to “early adopters.” For scale, there are around 10 million Bitcoin holders worldwide, with around half holding Bitcoin purely for investment purposes. Objectively, cryptocurrencies are not necessary because government-backed currencies function adequately. For most adopters, the advantages of cryptocurrencies are theoretical. Therefore, mainstream adoption will only come when there is a significant tangible benefit of using a cryptocurrency. So what are the advantages to using them? Comments Netanel Kabala, co-founder of fiat-to-crypto on-ramp Simplex, told Decrypt that there are other reasons why banks are worried: “Some are concerned with reputation, while others are nervous that the user would not be able to pay and would default, in the case of credit cards,” he said. But the exact reason isn’t so important: “What it boils down to is that crypto is something that most banks have not taken the time to learn or understand, and they fear the unknown,” he said.