Despite the regulatory approval of the first spot Bitcoin exchange-traded funds (ETFs) in the United States, corporate adoption and trust in the cryptocurrency industry are still in their early stages.
The introduction of the first publicly traded Bitcoin (BTC) products through the approval of spot Bitcoin ETFs was seen as a significant milestone for the crypto industry’s legitimacy. However, according to Marc Degen, the co-founder and chairman of Trust Square, a blockchain-focused technology hub, corporate adoption is still in its infancy.
During his speech at the Web3 Corporate Innovation Day, Degen highlighted the discrepancy between the inflows of spot Bitcoin ETFs and traditional finance. While the U.S. spot Bitcoin ETFs accumulated $58.4 billion in total on-chain holdings since their launch, JPMorgan, a wealth management giant, attracted a record $489 billion in net new client inflows in 2023 alone.
This stark difference in inflows indicates that mainstream trust in the crypto industry is lacking. A study conducted by the Pew Research Center in 2023 found that approximately 75% of people who are aware of crypto do not have confidence in the reliability and safety of digital assets.
Degen emphasized the importance of corporations in building trust among mainstream users, noting that new crypto adopters tend to trust centralized exchanges (CEXs) backed by corporations over decentralized exchanges (DEXs). The trading volume on DEXs, totaling $3.86 billion in the past 24 hours, pales in comparison to the $17.6 billion volume on Binance, the world’s largest CEX.
Furthermore, while Bitcoin ETF inflows provide insight into institutional adoption, the complete picture is not revealed by looking at cumulative inflows alone. Grayscale’s Bitcoin Trust ETF (GBTC) has had a significant impact on total inflows, with the majority of outflows coming from the sale of 18,207 BTC worth over $1.19 billion.
In conclusion, despite the approval of spot Bitcoin ETFs, the cryptocurrency industry still faces challenges in corporate adoption and mainstream trust, highlighting the need for further development and education in the space.