Hottest Crypto Themes: Institutional Adoption, Regulation, & More!
The world of crypto is a rapidly evolving space. It can feel almost impossible to stay on top of all the latest news, narratives, and trends! Lucky for you the team at Velvet Capital has your back; we attended all the top conferences of the last month & compiled all the must-know info for your reading pleasure.
Overview
At “Permissionless”, the spotlight was on regulation, with the crypto community paying keen attention to recent SEC and CFTC lawsuits and the broader US regulatory landscape. There was also a significant interest in the integration of Real World Assets (RWAs) in the crypto space, driven by yields on US Treasuries and ventures into real estate. Notably, the presence of institutions in the crypto world is gaining momentum, as evident from the significant Wall Street and traditional finance sector attendance at these events. At “Messari Mainnet”, the discussions largely revolved around the U.S. regulatory environment and its implications for the crypto community, emphasizing the need for bipartisan cooperation in crypto legislation.
Lastly, “TOKEN 2049” shifted the lens to Asia’s burgeoning crypto ecosystem, with Singapore and Hong Kong emerging as regional powerhouses. Here, DeFi’s resilience in the face of market fluctuations was celebrated, with discussions highlighting its appeal to institutions and the vital role of bridging traditional finance and the digital world.
As these narratives unfold, Velvet Capital stands poised to bring the next generation of fund managers on-chain by offering a best-in-class DeFi operating system- enabling seamless launching & management of on-chain funds and structured products. Velvet Capital will launch its professional-grade DeFi operating system this October — earn 2x rewards on the first $5 million in TVL.
Sign-Up For A Demo Today: https://www.velvet.capital/institutions/
Permissionless
Main Takeaways:
First off, this conference had a strong focus on regulation in crypto. A big talking point was the recent SEC and CFTC lawsuits, a Bitcoin Spot ETF, and how crypto can continue to operate in the US.
In terms of the recent lawsuits, people’s attitude tended to be that there was no regulation coming soon in the US, and regulatory agencies would continue to lose when a case goes to court. Still, if you are small they will try to get you to settle for a quick and easy win.
One of the things I noticed at the conference was how many lawyers and accountants are entering the industry due to the US landscape. While speaking to people at events, in the halls, and on the conference floor, there seemed to be a high amount of lawyers looking to capitalize on the confusion that’s being caused in this industry.
Besides regulation, there was also a focus on RWAs (Real World Assets) in crypto. Stemming from increased yields on US Treasuries ~5%, many projects are looking to capture market share of the growing short-term treasury market. Another area of RWAs that was common for people to be building on was Real Estate, whether it was trading the price per square foot in a City, or investing in commercial real estate, there were a lot of projects looking to capitalize on the growing opportunity.
As Velvet Capital is looking to make portfolio management simpler on-chain, we are primed to capture the RWA movement as when assets move on-chain we will work to integrate them into our protocol so you can get exposure to assets in the real world on-chain.
If you’d like to have your input heard, you can mint a Founders Club NFT here where you will join the genesis of Velvet DAO and be able to create and vote on protocol proposals such as which RWA platforms to integrate with.
The biggest takeaway from Permissionless has to be, that the institutions are coming!
After listening to a few of the speakers, it was clear to me that the Institutions are well on their way to entering Crypto, DeFi, and Web3. For example, many large Traditional Finance companies had people from their firms at the conference and there was a lot of chatter surrounding PayPal’s Stablecoin, Spot BTC ETFs, Solana Pay, and much more.
As these institutions come into the market Velvet Capital will help them create and manage portfolios and financial products on-chain.
Top Talks:
Erik Voorhees Keynote
Crypto: Why are we here? https://youtu.be/2XlYSmIlpfs?feature=shared
This Keynote speech kicked off Permissionless and the premise was to speak about why we are in crypto. Think about it, why are you here in crypto?
His answer… he is here for the rebellion. A peaceful one, but a revolutionary one where the movement of money no longer required permission from others.
And why is this revolution needed? Because it was permissionless. Bitcoin invented permissionless money and Ethereum made it possible to build an entirely permissionless financial system.
In my opinion, this is one of the best Keynote speeches I have seen at a conference and I highly recommend you check it out.
Do We Still Need To Worry About Macro?
Jim Bianco (Bianco Research), Jurrien Timmer (Fidelity), and Mark Yusko (Morgan Creek Capital)
This was one of the most interesting talks on the institutional stage at Permissionless this year.
For the most part, these speakers believed that Macro matters when it comes to the price of Bitcoin.
A few of the Macro Factors to watch:
Interest Rates: Having a risk-free rate of ~5% on US Treasury bonds gives you the option to earn a yield higher than staking or lending in many tokens and protocols with virtually zero default risk. This same factor is also playing out in the Traditional Financial Market with Stocks and Corporate Bonds.
Money Printing: The US, UK, China, and most countries around the world are suffering from massive deficits and a high amount of debt compared to GDP. The amount of spending from countries and the rising interest payments on the debt will cause the government to continue printing more money. When governments print more fiat, stores of value assets like Bitcoin and Gold tend to rise.
For these reasons and many more, they argue how much of an effect the macro environment will have on crypto and Bitcoin.
Messari Mainnet
Main Takeaway:
As a conference in the US, the conference had a big regulatory focus. Most of the speakers on the main stage at this conference were speaking about the US and our regulatory outlook, from Congress members to presidential candidates, to CEOs of major crypto companies. There was a high amount of focus on the regulatory landscape. And the consensus is not much will change in the next 15 months as we are gearing up for another re-election.
One major takeaway I had from this conference was that Crypto Legislation has to be bi-partisan. Ritchie Torres, Congressman in New York and Crypto Supporter, had to vote against a crypto bill because it was only being pushed by Republicans and he never had the chance to mark up and add his thoughts. When Democrat voices can be heard on a bill, however, he has notoriously voted in favor of crypto.
At this conference, there was no shortage of DeFi protocols being built either. There are many DEXs, Liquid Staking Protocols, Real World Assets, and other products being built. It looks inevitable that we will see another massive DeFi hype cycle with a lot of the promise now being built out.
Another takeaway from this conference is the growing Wall Street presence at Crypto events. At this event, there were many Hedge Fund Managers, Venture Capitalists, Bankers, Prop Traders, and others from the traditional world.
Top Talks:
Fireside With US Presidential Candidate Vivek Ramaswamy
Link: https://x.com/twobitidiot/status/1705358206568911027?s=20
Vivek Ramaswamy, a US businessman turned politician, has grown from unknown to third in the Republican presidential primary. In this Fireside Chat with Ryan Selkis (CEO of Messari), Vivek discussed the presidential race, his issues with regulatory agencies (or as he calls it the 4th unelected branch of government), his opinions on how crypto has been treated by the regulators and what he would change.
How he would reform financial regulators in the US:
75% Headcount Reduction: would apply to all agencies including FDA, SEC, FTC, DOE, FBI, and others.
Rescind a majority of federal regulations that fail the Supreme Court’s test in West Virginia vs. the EPA which says if Congress (the legislative branch of government) did not give the power to that agency, then that regulator does not have the power to issue regulation. This would prevent regulation by enforcement from both the SEC and CFTC in crypto, as Congress has not given them the right to regulate the industry yet.
Fireside with Brain Armstrong (Co-Founder and CEO of Coinbase)
Link: https://twitter.com/twobitidiot/status/1705282155499200603?s=20
Coinbase was one of the main sponsors at Mainnet. They had many employees at the conference and the second floor of the conference was rented to Coinbase. Of all the conferences in the US I have been to, this one had the largest Coinbase presence.
This talk focused on policy in the US, and Brian said he got into Crypto for Tech and Building but has shifted focus to regulation as Gensler, Warren, and others have been trying to fight the crypto industry. To help regulation, Coinbase has started https://www.standwithcrypto.org/ to showcase which government officials are favorable to crypto and which ones are not. This way people can know if their representatives are pro or anti crypto.
Brian has given $1 Million to Crypto Super Pacs, incentivized others to help get favorable crypto legislation, and made it simple for crypto users to get involved themselves through donations, local town halls, and phone calls.
Not only does he believe donating and contacting politicians will work, but he also believes the better we can make Crypto products, the more politicians will be forced to implement favorable crypto regulation because more of their voters will use it.
TOKEN 2049
Main Takeaways:
Turning gaze toward Asia as a thriving crypto ecosystem
The cities of Singapore and Hong Kong have firmly entrenched themselves as the epicenters of crypto activity in Asia. The DeFi community in these locales is experiencing exponential growth, drawing talent from the traditional financial sector. Asian institutional liquidity providers are at the forefront of this transformation, demonstrating a robust appetite for innovation.
DeFi’s resilience amid market turbulence
In the face of market volatility, DeFi’s appeal remains strong to many institutions. Visionary builders are actively addressing critical problems in traditional finance, such as decentralized exchanges (DEXs), real-world asset integration, term loans, and institutional risk infrastructure. What’s most impressive is the deep sense of community and collaboration that drives this sector forward.
As for the evolving narratives with DeFi shifting to institutions …
DeFi infrastructure is evolving with a keen eye on serving institutional needs. This evolution encompasses a spectrum of offerings, ranging from on-chain treasury management and asset diversification to term loans, prime brokerage services, and advanced risk management tools. Notably, established centralized players are recognizing the value of collaborating with teams that have pioneered non-custodial solutions, enabling users to maintain self-custody of their assets. Additionally, there is a noticeable emergence of multi-strategy funds and proprietary trading firms who are getting more and more interested in understanding DeFi and willing to invest in DeFi DAOs for extra liquidity for their strategies.
Bridging the Gap: Empowering Institutional Engagement
Enhancing institutional involvement hinges on enhancing DeFi infrastructure capabilities and digitizing workflows, as a critical bridge between traditional and digital assets.
DeFi represents a fundamentally digital-native infrastructure. To facilitate more widespread institutional participation, institutions will require a clear understanding of how to harness this infrastructure for purposes such as risk management and the tokenization of diverse asset classes, thereby reaping the rewards of efficiency and enhanced liquidity.
At Velvet Capital, we are dedicated to simplifying on-chain portfolio management and bringing the next generation of fund managers on-chain. We are well-positioned to embrace all the top emerging trends like the Real World Asset (RWA) movement. We are actively working to integrate on-chain assets into our protocol.
Join the Velvet Family!
Join top web3 builders, giga-brains, fund managers, & investors in Velvet DAO!
Follow us on Twitter, and LinkedIn and join us on Discord & Telegram for more updates! We want to hear from you, don’t be shy.
