There is a lot of debate within the cryptocurrency community as to where development will take place.
Once we move past Bitcoin, which is more speculation as reserve, we get into the nuts and bolts of an emerging financial system. While this is not totally decentralized, as many imagined, the entry of Wall Street is altering things.
It is beyond doubt that existing financial entities are embracing both crypto and blockchain. The former provides a mechanism for them to make money from. It is a new asset class that they are developing products around.
Blockchain is a new network structure that is also being adopted. Many institutions are not really concerned with controlling the network. After all, financial institutions often have their operates occurring on others' networks.
Instead, they are focused upon controlling the products they bring out. We see this with blockchain being adopted. A way to frame this is with stablecoins. The issuer only wants to be where the users are. The specific chain is of little relevance.
Individuals can provide reasoning as to the benefits of one chain or another. Ultimately, this is not where success comes from.
In this article we will look at what the movers and shakers are doing.
Tom Lee is starting to get a lot more attention. He was a noted go-to person for CNBC regarding crypto, having appeared on that network for years. However, it seems hit move deeper into the crypto realm is getting him more coverage.
Now, when he says something, more within this industry are listening.
As the Chairman of Bitmine Emergent, he is responsible for decisions that are affecting crypto. One is the move to load up on Ethereum, using that as the company reserve on the balance sheet.
Lee believes Ethereum is going to be the bit winner in the "network race". Here is where we get into debate, with many forming an option.
That said, Lee brings up a point that is, in my view, most crucial to the discussion.
Lee emphasized Ethereum's position as a technology platform, not just a digital asset like Bitcoin.
"Ethereum is like the preferred choice for Wall Street. It already is more than 60% of all the tokenized real-world assets, and that share is growing," he explained.
We best look at this as the center of the discussion.
Ideology can provide a basic framework. However, if we are married to it, in spite of what the real world is doing, we will come up on the short end of the stick. Believing our views are what is happening might lead to catastrophe if we are incorrect.
We can promote decentralization and distribution all we want. The challenge, for the moment, is the money resides elsewhere. Those of us involved in crypto have little stake. The total market cap is about $3.5 trillion. This is nothing compared to even the stock market, let alone all the other assets.
Blackrock, a single institutions, is 3x the total in assets under management. Let that sink in.
Wall Street has the ability to move things due to the size of the wallets. They are playing with big money. When they make a decision, is an skyrocket.
Look at the amount of money that flooded into the Bitcoin Spot ETFs over the past 18 months. We are nearing the $100 billion mark. How long would that have taken with individuals?
Hence, we must consider the logic Lee is presenting.
With entities like JPMorgan and Robinhood building stablecoin and tokenization infrastructure on Ethereum, the trend appears to be solidifying.
When asked whether Solana could disrupt Ethereum's lead, Lee acknowledged the competition but pointed to adoption patterns. "JP Morgan's stablecoin is built on Ethereum. Robinhood is building their tokenizing business on Ethereum. As a layer one, Ethereum is already entrenched."
Naturally, Lee's forecast could be wrong. However, this is one that is complimented by the ability to move some large sums of money behind the view. That is exactly what Lee did.
The next financial system will be hybrid. Wall Street firms are not losing their relevance, at least not overnight. It will take a couple decades for them to fade away. The cracks are in place but their power is still strong.
For that reason we have to consider what they are doing. Robinhood is a recent entrant into the financial game, and it is looking at RWA development on Ethereum.
And with JPMorgan, whether we like him or not, Jamie Dimon is has more influence than anyone else on Wall Street.
If all these entities are looking at Ethereum over the other EVMs, that is worthy of contemplation.
