Institutional Traders Are Finally Coming to Save Digital Currency

Last month, I wrote about how institutional traders are not coming to save digital currency traders. 71% of institutional traders have no intention of getting involved in digital currency markets anytime soon.

People often ask me what institutional traders are doing in digital currency markets. Last month, I wrote about how they are not coming to save traders. 71% of institutional traders have no intention of getting involved in digital currency markets anytime soon.

However, that piece deserves a follow-up, showing that the institutions are coming into blockchain technology and digital assets in a big way. While the big banks’ trading desks have realized most coins are worthless, the biggest financial institutions in the world are waking up to just how powerful blockchain technology, digital currencies, and distributed ledgers are.

Let’s explore some of the most noteworthy institutional projects involving blockchain and distributed ledgers over the past few years. Looking at what they’re doing will give us some insight into what they’re thinking and how the future might look.

* In 2023, Catena Media announced it’s investing €10 million in Web3 startup MetaMap. The startup is focused on developing a "decentralized, open-source spatial web platform."

* Earlier in 2023, several institutions, including Goldman Sachs, Blockfolio, and CMT announced investments in blockchain startup Aventus. The startup is focused on developing an enterprise-grade blockchain protocol for tokenized assets.

* In 2022, several institutions, including Citi Ventures, Draper Associates, and NGC Ventures announced investments in blockchain startup Flow. The startup is focused on developing a high-throughput blockchain protocol for scalable decentralized applications.

* Also in 2022, several institutions, including Kenetic Capital and Blockwall Capital announced investments in blockchain startup Unbound. The startup is focused on developing a platform for next-generation cybersecurity tools.

* In 2021, several institutions, including Point72 and Coinbase Ventures announced investments in blockchain startup TRM Labs. The startup is focused on developing an institution-grade blockchain risk management platform.

* In 2020, several institutions, including Circle and Blockfolio announced investments in blockchain startup Mesh Ventures. The startup is focused on investing in early-stage blockchain startups.

* In 2019, several institutions, including Samsung Next and Monolith announced investments in blockchain startup SETL. The startup is focused on developing a cross-border payments system using blockchain technology.

* And in 2018, several institutions, including Union Square Ventures and NGC announced investments in blockchain startup BTSE. The startup is focused on developing a multi-asset exchange.

The above is by no means an exhaustive list of all the institutional blockchain projects and pilots, but it covers the biggest and most ambitious of them. Scanning the project descriptions, you’ll notice a few concepts jump out at you multiple times: cross-border transfers, settlements, central bank digital currencies (CBDCs), tokenized assets, and digital money.

We can learn from this that the world’s biggest institutions aren’t interested in the price of BTC or the latest memecoins; they’re interested in how blockchain, smart contracts, and tokens can rewirable the global financial system to make it more efficient, transparent, and interoperable.

Those who have entered the industry in the past decade may not be aware that Satoshi Nakamoto released Bitcoin as a peer-to-peer payment system capable of micropayments. A glance over the first page of the whitepaper or Satoshi’s early forum posts makes that abundantly clear.

While today’s BTC is a far cry from Satoshi’s original invention, the point is that Bitcoin’s inventor intended it for a lot more than speculation and HODLing. He intended it to be used for small, casual payments, including tiny payments and was convinced it didn’t have a scaling ceiling.

There’s no need to rehash the history of Bitcoin here. It’s enough to note that, after 15 years of confusion, the world is finally realizing how powerful blockchain technology and digital currencies are, and it has nothing to do with the current value of any given token.

Institutions are now experimenting with several blockchains and ledgers for these projects. Some are working on their own internal blockchains, while others are collaborating with startups. But no matter how they approach it, they’re showing interest in building the future of finance on blockchain.

Distributed ledgers like BSV enable hyper-efficient, time-stamped, peer-to-peer transactions at scale. Anyone, anywhere, can pay another person elsewhere in the world for amounts ranging from millions of dollars to fractions of a cent. Settlement is instant for all practical purposes, and with smart contracts and the original opcodes, all types of interesting contracts and transactions can be created.

While the world’s biggest financial institutions have only dipped their toes in the blockchain pond and are still focused on using the ledgers they control, I’m still convinced that, in time, blockchain will take the same course as the internet: the world will move onto the most scalable, efficient public protocol that