Decentralized finance is growing, how DeFi is becoming the ‘NewFi’
As institutional interest in crypto grows with the introduction of Bitcoin and Ethereum 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 institutional participation 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 the Guardian wallet platform, shared his thoughts on the future of finance.
The executive explained that institutional participation in crypto will be positive for the long-term growth of cryptocurrencies, for the nascent asset class and the underlying technology in the minds of individuals who feel nervous, especially in older demographics.
Toledano addresses the elephant in the room, noting that these large institutions could take over the crypto space by controlling all or most of the digital asset supply, but that such a plan is unlikely, saying “if they did that, they'd be shooting themselves in the foot because most people don't want to own it.”
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Instead, as financial institutions continue to coexist alongside decentralized finance through what Toledano calls “NewFi” or “New Finance,” self-custodian options are likely to carry a larger share of the market.
“I think if institutions had like 20% of these assets and they were selling a spot, an ETF or something, 80% would be in public hands. It makes sense.”
Institutional access to digital asset investment vehicles
According to the latest CoinShares Weekly Earnings Report dated July 22, 2024, the digital asset investment vehicle saw $1.35 billion in revenue over the 7-day period, primarily from investors in the United States.
In the year On July 23, 2024, spot Ethereum exchange-traded funds went live on US stock exchanges, registering over $1 billion in trading volume in a single day, demonstrating strong institutional demand for crypto ETF products.
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