Institutions have forced cryptocurrencies to grow, and that's a good thing

It has been a long and winding road for the blockchain industry and the crypto community to rehabilitate its reputation and regain a solid footing. And he still has a long way to go.

However, the past year, and specifically the last four months, has shown how worthy projects have been able to gradually shed the industry's image as a gang of youthful interlopers in the technological and financial spheres. In a way, we can thank the last devastating bear market, which put cryptocurrencies in an unprecedented situation. crypto–bitcoin–ethereum-price-ftx-outlook-51671148010″ target=”_blank” rel=”noopener”>ice Age that decimated what many considered irrefutably stable elements in the industry. Who would have imagined that FTX would be where it is today three years ago?

With signs that now point towards a bitcoin-fomo-is-back-this-is-officially-a-craze.html” target=”_blank” rel=”noopener”>fully developed or established In the bull market, a few key drivers are clear catalysts for this renewed period of blockchain prosperity. The main ones are institutions, especially those in the traditional financial field, that enter the blockchain field.

Of course, the match that lit the flame here is the bitcoin Spot ETF slate. bitcoin-011023″ target=”_blank” rel=”noopener”>approvals by the U.S. Securities and Exchange Commission earlier this year. This measure has sparked greater institutional interest and concrete actions. crypto-options” target=”_blank” rel=”noopener”>does it move of traditional financial giants to offer crypto services and investment vehicles to their clients.

As someone who has been involved in crypto and writing about the industry for years, I find it encouraging to see prominent names in traditional finance finally adopting certain aspects of blockchain technology. This is especially true after many years of institutional leaders berating cryptocurrencies as a whole or circling the industry without making any meaningful moves. But what has caused this change in events now?

The evolution of cryptocurrencies over the years follows a very non-linear maturation path. This path continues as new technologies, projects and use cases emerge that drive industry capabilities.

That being said, there has been a concerted effort by projects within the industry to improve their situation since the last bear market hit in full force. Yes, all past bear markets have eliminated fraudulent projects and left room for legitimate companies to gain a foothold. But this time, the makeover has gone beyond a superficial rebranding that would cover up unsustainable business practices.

Part of this can be attributed to something completely out of the crypto industry's control: crypto-regulation-2024-new-laws-will-bring-clarity-and-trust” target=”_blank” rel=”noopener”>regulatory clarity. Even a year ago, cryptocurrency regulations and laws around the world were less developed than crypto-mica-regulation-concerns-crypto-service-providers/” target=”_blank” rel=”noopener”>today—And there are more rules in the works. However, due to this newly established regulatory reality, blockchain projects have more defined guidelines to ensure that their development does not occur illegally.

Likewise, regulatory clarity opens the door for traditional institutions to enter the fold, knowing that they are not adopting a pariah industry. Cryptocurrencies still have a controversial topic relationship with regulators, but industry leaders are much more willing to put compliance at the forefront of their operations, mimicking the way banks and other major financial institutions work.

And institutions clearly like to reward those efforts with collaboration and capital.

Now, you have blockchain projects that are directly focused on enterprise and institutional use that are gaining popularity. For example, it has Ripple leading the way as a long-standing go-to network and protocol specifically for enterprise use. But now, startups like Coreum are taking this enterprise-level cooperation a step further by bridging their network from Ripple's XRP Ledger, essentially allowing companies using Ripple's protocol to increase liquidity and put their digital assets to work in new ways. Using ISO 20022 messaging, Coreum shows how blockchain networks can attract institutional engagement by implementing international financial communication standards.

While Ripple has focused on institutions since its inception, its partners provide attractive services for institutions looking for a way into the blockchain. While the interest is there, it is accompanied by a long-standing question about how institutions approach the supply of blockchain adoption.

Like any new technology an institution considers incorporating, it has to consider whether that manifests itself through developing a proprietary product internally or partnering with established companies within the space to partner and guide them along the way. Cryptocurrencies are no exception here, and this issue has become more heated now that institutions are taking blockchain seriously.

In reality, whether institutions adopt blockchain internally or in partnership comes down to budget and technical feasibility based on what they want to achieve. If it's something as rudimentary as offering a spot ETF, they can probably do it in-house. Other offers may not be so simple.

For example, the tokenization of real-world assets has become a major driver of institutional activity in the adoption of blockchain technology, and this is where a more robust infrastructure is required to ensure everything runs smoothly and securely. While institutions can choose to take that journey alone, companies like GK8 have consistently partnered with leading institutions offering a platform that guides them every step of the way of digital asset tokenization. Likewise, a native blockchain platform like GK8 has the security and custody of its digital assets set in stone through the use of offline storage and token issuance, effectively making an institution's assets unattainable to outsiders. hackers.

So unless an institution is willing to go the extra mile to develop an in-house solution that can measure up to existing companies doing the same thing, it might be more profitable and safer to partner in the long run. After all, the crypto industry knows a thing or two about how much damage a hack can cause; therefore, it can guide institutions to avoid a similar fate.

Once again, all of these advances in institutional blockchain collaboration come from projects seriously taking the time out of the spotlight to regroup and redevelop technology to address critical areas. Efforts to achieve institutional acceptance have not gone unnoticed and, in turn, have revitalized the potential of cryptocurrencies as a mature and viable industry, even in sectors that were previously considered more superficial.

An example that comes to mind is nfts, which have really gone through the worst public perception even when they were a popular item in the blockchain and web3 space. Sure, now you have major companies like EA Sports and Nike. nft-sneakers-swoosh-ea-sports-games-nft” target=”_blank” rel=”noopener”>using nfts in games and loyalty programs, but there are also nfts that appear through companies that incorporate new technologies.

For example, a startup like ChainGPT deploys generative ai technology for users to create nfts themselves and make the technology more accessible, partnering with Polygon Labs in the process. It also expanded its ai capabilities to partner with Binance for its news service, using ai to combat the crypto-markets” target=”_blank” rel=”noopener”>fake news and bot epidemic in crypto communities. While it's not exactly in the same vein as Citi or HSBC tokenizing gold, it demonstrates how projects can legitimize themselves by being more willing to evolve.

While cryptocurrencies and blockchain may not seem as free as they used to be, much to the chagrin of their early enthusiasts and die-hard purists, their appeal to institutions has given the industry much-needed stability and legitimacy. By refining and adapting their technology to work in areas where people really need it, blockchain projects have a rare opportunity to establish themselves as infrastructural pillars for a new financial and technological reality.

Even if the industry is less glamorous and less meme-laden than before, it's worth making a commitment to sustainability and long-term growth to eventually reach widespread, mainstream acceptance. As long as its core principles remain intact, blockchain gives traditional institutions the potential to realize financial products and services through a new lens, and even extend its usability beyond the financial realm.

It is now up to both the projects and the institutions to maintain the positive momentum.

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