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Can anyone tell me the timeline for institutions to enter the crypto field?
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2020 - Initial Exploration: Banks and traditional financial institutions began to tentatively enter the crypto market. In mid-2020, the Office of the Comptroller of the Currency made it clear that banks could custody crypto assets, opening the door for custodians like Bank of New York Mellon. BNY Mellon subsequently announced in 2021 that it would provide digital asset custody services. That same year, corporate treasuries also began to dabble in crypto: MicroStrategy and Square made high-profile Bitcoin purchases as reserve assets, signaling increased institutional confidence. Payment giants also began to take action - PayPal launched a cryptocurrency buying and selling service for US customers in late 2020, bringing digital assets to millions of users. These moves signaled that mainstream institutions were beginning to view cryptocurrencies as a legitimate asset class.
I think 2021 is a stage of rapid expansion With the bull market in full swing, 2021 has witnessed the acceleration of the integration of traditional finance and the crypto sector. The milestone events of Tesla's purchase of $1.5 billion in Bitcoin and Coinbase's listing on the Nasdaq in April 2021 have become an important bridge connecting Wall Street and the crypto sector. Investment banks have also responded to customer demand: Goldman Sachs restarted its crypto trading department, and Morgan Stanley began to provide access to Bitcoin funds to wealthy clients. In October of the same year, the first Bitcoin futures ETF in the United States was officially launched, providing institutions with regulated crypto investment tools. Major asset management companies such as Fidelity and BlackRock have also begun to set up dedicated digital asset departments. In addition, Visa and Mastercard have established partnerships with stablecoins, such as Visa's USDC pilot project, demonstrating confidence in crypto payment networks. The report clearly depicts how traditional finance has gone from initial exploration to rapid expansion, laying the foundation for further integration of crypto and traditional finance in the coming years.
I can't forget the bear market and infrastructure construction in 2022. Despite the downturn in the crypto market in 2022, marked by events such as the Terra crash and FTX bankruptcy, institutions continue to build infrastructure. In August of that year, BlackRock, the world's largest asset management company, partnered with Coinbase to provide crypto trading services to institutional clients and launched a private Bitcoin trust for investors, a move that released strong market confidence. Traditional exchanges and custodians are also expanding digital asset services. For example, Bank of New York Mellon has launched crypto asset custody services for some customers, while Nasdaq has developed a custody platform. At the same time, JPMorgan Chase uses blockchain for interbank transactions through its Onyx division, and JPM Coin has processed hundreds of billions of dollars in transactions in wholesale payments. Tokenization pilot projects are also gradually emerging: JPMorgan Chase and other institutions have simulated DeFi transactions of tokenized bonds and foreign exchange using public blockchains in the Project Guardian project. However, U.S. regulators have taken a stricter approach to market turmoil, leading some companies such as Nasdaq to pause or slow down the launch of crypto products by the end of 2023 pending clearer rules.
Let me talk about the resurgence of institutional interest in 2023. 2023 saw a cautious recovery in institutional interest. In the middle of the year, BlackRock submitted an application for a spot Bitcoin ETF, followed by Fidelity, Invesco and others. This wave of applications was an important turning point, especially considering the SEC's previous rejections of similar proposals. In the same year, crypto infrastructure supported by traditional finance began to come online: EDXMarkets, a digital asset exchange backed by Charles Schwab, Fidelity and Citadel, officially operated in 2023, providing institutions with a compliant trading platform. At the same time, the tokenization wave of traditional assets accelerated - for example, private equity giant KKR tokenized part of its funds on the Avalanche blockchain, and Franklin Templeton migrated its tokenized money market fund holding US Treasuries to a public blockchain.
There is also the approval of spot ETFs in early 2024. In January 2024, the SEC finally approved the first US spot Bitcoin ETFs, followed by the Ethereum ETF, a milestone that marked the mainstreaming of crypto assets on US exchanges and unlocked billions of dollars for pension funds, registered investment advisors, and conservative portfolios that previously could not hold crypto assets. Within weeks, crypto ETFs attracted a large amount of capital inflows, significantly expanding the scope of investor participation. Institutional crypto products continued to expand during this period - from stablecoin initiatives such as PayPal's PYUSD stablecoin to banks such as Deutsche Bank and Standard Chartered Bank investing in digital asset custody startups. As of March 2025, almost every major US bank, brokerage firm, and asset manager has launched crypto-related products or formed strategic partnerships in the crypto ecosystem, reflecting the comprehensive entry of institutions into the crypto field since 2020.
