By Kathy Chu, TruthDAO
Crypto pioneer Wilfred Daye, chief executive of Securitize Capital, a digital asset-management firm, was a guest on TruthDAO's Crypto DeFined on Aug. 11. Daye, a veteran of the banking world, opined on the state of crypto, and what he thinks it will take to catapult the industry to the next level.
Daye’s top 5 takeaways (edited for clarity):
Institutional adoption of crypto is in the early stages: “Over the last four to five years we saw tremendous growth in building the picks and shovels of the cryptocurrency ecosystem, and now we’re just beginning to see financialization." As a result, he observes: "More significant institutions are getting into cryptocurrency.”
By investing in Bitcoin and Ethereum, you're betting on technology. “The crypto market is highly volatile. But over time, I think people will realize it’s a long term investment in the technology itself.”
Will Ethereum leapfrog Bitcoin as the largest cryptocurrency? Daye isn't taking a stand on that one. But he does allow that “a lot of Ethereum maxis want to see the flip. . . People are very bullish about September due to the ethereum merge,” which is when the network moves to a less energy-intensive model of verifying transactions called proof of stake from a proof-of-work model.
Regulation is needed to take crypto to the next level. "Regulation invites institutional investors. No endowment funds or retirement funds will come to crypto if there's no regulation. Once we have the regulatory structure in place for crypto, you'll see a lot more interesting financial products."
Don’t expect the Fed to rescue crypto companies. Crypto companies “are very different from Lehman Brothers or AIG or Merrill, which are very regulated. Government will rescue large banks. But (Federal Reserve Chairman) Jerome Powell is not going to say, ‘I’m going to rescue the cryptocurrency world.’”
Watch the replay of the interview here.