• Tue. Feb 27th, 2024

Will Traditional Finance Beat Crypto Firms?

Will Traditional Finance Beat Crypto Firms?

Who is going to emerge as crypto’s big dog? After FTX’s collapse, the favorites were market leader Binance and long-standing Coinbase. Now, however, there is a chance that both companies will decline and the crypto crown will instead go to one of the new players backed by Charles Schwab, Fidelity, Citadel and others in the traditional financial arena.

And so a new person came forward Financial Times The report claims that deep-pocketed institutional investors are still interested in crypto, but they prefer to do business with new corporate consortia such as EDX Markets or Zodia (backed by the UK’s Standard Chartered) or brands such as Fidelity. In-house crypto infrastructure.

The theory here is that institutional money wants to stick with Wall Street players who know their names and aren’t tainted by the waves of corruption that have repeatedly tarred the crypto industry. The FT The report also claims that traditional finance players are adopting business models that make large investors more vulnerable.

“The infrastructure built by large institutions is very different from the actual structure of the crypto industry. Wall Street executives favor separating business units such as trading from custody as a way to reduce risk and potential conflicts of interest,” suggesting that new Wall Street offerings will be more attractive because they don’t rely on cloud computing.

The report concludes by quoting traditional finance executives who predict that EDEX and SODIA will soon dominate the market for crypto-institutional trading, and that Binance will remain in the relative crumbs left in the retail market.

If this were to happen, it would be remarkable and ironic how the crypto industry was born as a rebellion against the power structure of traditional finance and has maintained a deep distrust of banks and Wall Street ever since. What would Satoshi say if he found out that the biggest names in corporate finance had tamed his creation?

That’s why I suggest you take it FT Season with a large grain of salt. While the story makes many compelling points, it appears to have been planted by the PR departments of crypto’s corporate kingpins — complete with talking points. To be sure, some of these gambits to make crypto a safer place for institutional investors will pay off, and some players—notably Fidelity—have been in the game long enough to have their own crypto bonafides. But the idea that Wall Street is going to capture the lion’s share of the crypto market still feels premature.

Jeff John Roberts
jeff.roberts@fortune.com
@JeffJohnRoberts

Decentralized news

The FTX Estate An application was made to stay the mediation talks between Gemini And bankrupt Genesis, countering suggestions that FTX’s $3.9 billion claims are worth zero. (Bloomberg)

Lawyers, investment banks and consultants have billed more than $100 million FTX Until April 30. (WSJ)

Senior GOP lawmakers in the House introduced the new bill in the Finance and Agriculture committees. Securities and Exchange Commission And Commodity Futures Trading Commission. (good luck)

The Consumer Financial Protection Bureau FTX was cited in warning customers who park money on platforms such as Venmo And Apple p Risky and not FDIC insured. (CNN)

some Bitcoin The developers, upset by the soaring fees, want to create a spam filter to block transactions related to meme coins, but the plan is unlikely to succeed. (Bloomberg)

MEME O’ THE MOMENT

“Satoshi Rokamoto” headlines Bitcoin Prague:

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