Vince Quill4 hours agoDecentralized finance is growing up: How DeFi is becoming ‘NewFi’Traditional institutional giants like BlackRock, which has $10.6 trillion under management, have entered the cryptocurrency space.1282 Total views14 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksAs institutional interest in crypto grows, fueled by the introduction of Bitcoin and Ether exchange-traded funds (ETFs) in the United States, investors and industry participants are hotly debating the future of decentralized finance and its relationship to traditional finance, or TradFi.
At the heart of the debate is whether or not institutional involvement in crypto is a net positive or a net negative for the space. In a recent interview with Cointelegraph, James Toledano, chief operating officer of custodial wallet platform Savl, shared his thoughts on the future of finance.
The executive argued that institutional involvement in crypto would be positive for the long-term growth of cryptocurrencies, giving an air of legitimacy to the nascent asset class and the underlying technology in the minds of apprehensive individuals, particularly in older demographics.
Toledano addressed the elephant in the room, acknowledging the potential for these large institutions to take over the crypto space by controlling all or a majority of a digital asset’s supply. However, he said that such a scheme was unlikely, since “if they did that, they would shoot themselves in the foot because most people wouldn’t want to own it.”
Related: BlackRock’s Larry Fink says he was wrong, calls Bitcoin digital gold.
Instead, it is much more likely that self-custodial options will make up the vast majority of the market, while financial institutions continue to coexist alongside decentralized finance, interacting with distributed protocols in what Toledano called “NewFi,” or “new finance.”“I think if institutions had like 20% of these assets and they were selling them as spot ETFs, or whatever, then 80% were in the hands of the public. It makes sense.”A chart showcasing weekly inflows into crypto investment funds. Source: CoinSharesInstitutional inflows into digital asset investment vehicles
According to the latest CoinShares weekly inflow report, dated July 22, 2024, digital asset investment vehicles saw $1.35 billion in inflows during the seven-day period, primarily driven by investors in the United States.
On July 23, 2024, spot Ether (ETH) exchange-traded funds went live on United States stock exchanges, recording over $1 billion in trading volume within a single day, showcasing the intense institutional demand for crypto ETF products.
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