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Real Vision Interview: August 1, 2023, Crypto Daily Briefing featuring Shawn Douglass.

We've all heard that a wave of institutional adoption of crypto is on the horizon. But is it finally happening?

On Tuesday, August 1st, Amberdata’s Shawn Douglass (CEO and Co-Founder) joined Ash Bennington (Senior Host and Crypto Editor) of Real Vision to discuss the current and future state of institutional adoption as well as the effects that the U.S. regulatory environment might have on the next wave of institutional adoption.

Top 3 Institutional DeFi Takeaways

  1. Amberdata has a unique view into traditional finance’s continued adoption of digital assets. Before the FTX collapse, institutions were leaning into their crypto strategies. Post FTX, they continued building under the radar but just recently came back to the space full force. The BlackRock-led BTC ETF application surge, followed by the recent round of ETH ETFs, are prime examples of institutions “leaning in” once again.
  2. We are seeing growing institutional interest in DeFi, arbitrage opportunities, and derivatives - especially options. In fact, there was a 3X increase in CME crypto options trading this year, while spot market trading decreased. In terms of DeFi trading volumes, some DEXs are now outpacing CEXs. This suggests that institutions are actively trading on DEXs and also looking for surgical control over their price exposure by leveraging options. In terms of arbitrage, most of the activity is between CEX and DEX exchanges.
  3. While it is expected that the U.S. will have regulatory clarity soon, crypto regulations outside of the US are “more clear than cloudy” which has caused institutions to seize the opportunity offshore. We see intellectual capital, as well as AUM, moving from the U.S. to Hong Kong, London, Dubai, and Abu Dhabi.

DeFi and digital assets are an unstoppable trend that the rest of the world is adopting quickly. Firms need to be data-driven to find the real opportunity, leading many to consider derivatives as they look for risk control and more creative ways to capture opportunities in this space.

A recording of the full discussion is available here.

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