From ugly duckling to swan

 

For a long time, the crypto industry was the ugly duckling of the financial world. Traditional institutions and the media treated it like a Calimero, that cartoon chick forever protesting that the big ones are picking on the little one. An obnoxious adolescent, its excesses every bit as ripe as a fifteen-year-old's armpits. But now that institutional investors and banks are increasingly embracing the value of crypto technology, it's high time we put that aggrieved chirping behind us once and for all. Let's just call it what it is: a swan among swans.
 

Traditional players step in

A telling example of this shift caught my eye this weekend, when I opened de Volkskrant. This Dutch daily usually takes a sharply critical line on the crypto industry, repeatedly wagging its finger at echoes of tulip mania and pyramid schemes. To my surprise, the paper now ran the headline "from rebel investment to serious investment product" (de Volkskrant, 25 April). The article unpacked the growing interest of banks and institutional investors in crypto technology. And rightly so: traditional financial players are increasingly recognising the benefits of blockchain and the crypto infrastructure, and they are stepping in with real conviction.

Following in our footsteps

There are plenty of examples. Take the recent launch of Quivalis, a euro-backed stablecoin. Seven European banks collaborated closely on its introduction, providing a much-needed counterweight to the dollar stablecoins. Another: banks are making it ever easier for retail investors to gain exposure to Bitcoin through ETFs. These exchange-traded Bitcoin funds are currently the fastest-growing ETFs ever launched. Buoyed by that success, established banks are now piloting crypto wealth management services for their high-net-worth clients. With this strategy, they are following in our footsteps, and we see it as a quiet confirmation of the innovative course Amdax set years ago.

The importance of regulation

For institutional players and banks to enter the market in earnest, solid regulation is an essential prerequisite. In Europe, we have come a long way with the MiCAR framework, and in the US, real strides are being made with the Clarity Act. Unfortunately, that regulatory process is now being politicised and tied directly to the president and his insatiable hunger for self-enrichment. The resulting delay is regrettable, unnecessary and, above all, temporary. Because even if this bill were to fall victim to the political theatre of the midterms (as het Financieele Dagblad, ever fond of clickbait, gleefully reported on 28 April), the pressure from the financial sector is so great that even in a turbulent America, forward-looking and stable crypto legislation will emerge,  of that there is no doubt.

The crypto industry is here, and it is here to stay. No longer an ugly duckling, but a swan that has settled comfortably among its peers.