The digital asset ecosystem and infrastructure continues to undergo a dynamic maturation, Tom Nath, Chief Operating Officer, BitOoda said.
“Today there is a growing number of players who are not only dedicated to growing the space and advancing it from an infrastructure perspective, but doing it in a compliant way,” he said at the “Shining a Light on Digital Asset Markets 2021” conference hosted by The Association for Digital Asset Markets (ADAM) and Eventus.
“That kind of sets the stage for the massive institutional adoption that I think we’re all kind of positioning ourselves to receive or take advantage of,” he added.
Nath said that there is no real authoritative set of platforms that can offer those types of services today: “The pace of change when it comes to platforms that can offer the types of full service platforms or ‘one-stop shops’ is a big part of the future of the infrastructure that we’ll see.”
Georgia Quinn, General Counsel, Anchorage Digital, argued that in addition to adoption by institutions and end users, regulation is key to wider adoption of digital assets.
“We have to get the regulators to understand this asset class, understand the technology, understand the tools and the infrastructure that’s going to be required to allow it to thrive and allow it to operate in a safe and sound manner,” she said.
Nath added that some of the non-regulatory factors that are currently slowing institutional adoption are potential price manipulation, lack of price discovery and transparency, and other kinds of established infrastructure that more traditional asset classes have.
According to Dan Burstein, General Counsel and Chief Compliance Officer, Paxos, there certainly are barriers and there are certainly in the context of any other space. “Some players and some participants are ready, some components of the market and some aspects are ready for mass institutional adoption, and some are not. We’re sort of early on the curve, but it’s continuing to go up.”
Nevertheless, there’s been an extraordinary development at all times, according to Burstein: “Five years ago, you wouldn’t have multi party computing technology, and now you see it’s turning hot wallets into warm wallets, and it’s bridging the gap between security and availability. Where there’s much more sophistication in the ability to store digital assets in a safe and secure but also available way through new technology.”
He added that similarly, there’s been huge evolutions in blockchain monitoring, and in trade surveillance and in price discovery in more areas that make the markets much more mature than they used to be.
“So there’s a long way to go. But we’ve come a long way as well,” he argued.
Burstein said that the more adoption, the more network effects that we have, the more people that were in the space, the more liquidity we have, the more we’re going to see the digital assets based look like other asset classes that have had greater adoption.
“You’re gonna see things like greater price discovery and competitive fees, and a greater variety of order types and just tons of liquidity across a lot of different platforms, and really robust market manipulation controls,” he said.
Quinn believes that it’s necessary to educate people about the “wonderful use cases for this technology”.
“It’s so much more than Bitcoin. And as soon as we can get people to understand that and have tangible use cases, the more this industry will take off and thrive,” she said.
