The cryptocurrency industry is still in its early stages when it comes to corporate adoption and trust, despite the initial approval of the first spot Bitcoin exchange-traded funds (ETFs). The regulatory green light for these ETFs in the United States was seen as a significant milestone for the legitimacy of the crypto industry, as it introduced the first publicly traded Bitcoin (BTC) products to the market.
However, according to Marc Degen, the co-founder and chairman of Trust Square, a blockchain-focused technology hub, corporate adoption is still at a nascent stage. During his address at the Web3 Corporate Innovation Day, Degen highlighted the disparity between the inflows of the spot Bitcoin ETFs and those in traditional finance.
While the U.S. spot Bitcoin ETFs have accumulated $58.4 billion worth of total on-chain holdings since their launch, financial giant JPMorgan reported a staggering $489 billion worth of net new client inflows in 2023 alone. This means that JPMorgan alone attracted over eight times more inflows than all eleven U.S. spot Bitcoin ETFs combined.
The lack of mainstream trust in the crypto industry is cited as the main reason behind the slow digital asset adoption. A study by Pew Research Center revealed that approximately 75% of people who are aware of cryptocurrencies lack confidence in the reliability and safety of digital assets.
To build more trust among mainstream users, corporations play a crucial role, according to Degen. New crypto adopters tend to rely on corporate-backed centralized exchanges (CEXs) rather than decentralized exchanges (DEXs), as evidenced by the significant trading volume difference between the two.
While DEXs recorded a cumulative trading volume of $3.86 billion in the past 24 hours, this pales in comparison to the $17.6 billion trading volume of Binance, the world’s largest CEX.
The bigger picture of institutional adoption in the crypto space goes beyond just looking at cumulative Bitcoin ETF inflows. Grayscale’s Bitcoin Trust ETF (GBTC) has played a significant role in this arena, accounting for a large portion of outflows and impacting the total amount of cumulative inflows from ETFs.
To date, Grayscale’s GBTC has sold over 18,200 BTC worth more than $1.19 billion, making it a major player in the market.