- FTX CEO Sam Bankman-Fred said that institutional adoption of cryptocurrencies could accelerate in 2022.
- The pace of adoption depends on the level of regulatory clarity in the United States and globally, he told Bloomberg on Monday.
- The billionaire said that much of the level of activity in the cryptocurrency industry in 2021 was “preparatory.”
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Cryptocurrencies can expect more institutional adoption in 2022 — but whether it’s a tidal wave or a lean wave will depend on what happens on the regulatory front, according to FTX President Sam Bankman-Fried.
The CEO of the crypto exchange has predicted that regulatory clarity will open the door for some large investment banks and pension funds to enter the industry this year.
But he said developments in the regulation of digital assets will determine the pace of their adoption by financial institutions.
“Especially if we feel like they’re becoming clear, it could come in a tidal wave, and it could come in minuscule form,” he said in an interview published on Monday.
However, he does not expect a rapid inflow for at least the next six months as it takes time for organizations to incorporate new platforms and assets.
“It will be a long process, perhaps extending over a few years,” he said, adding that the size of the market could be “really enormous.”
“I’ve talked to every big bank, every big investment bank, pension funds – they’re all looking at the sector. Many of them are starting to lay the groundwork for their activities in it, but it’s slow and taking time.”
A growing number of financial institutions, including BlackRock, Mastercard, and Visa, have already offered cryptocurrency-related offerings. Some financial advisors have recommended that digital assets should be part of a portfolio, regardless of your age.
Bankman-Fried, who launched crypto exchange FTX in 2019, noted the activity in the crypto industry last year, saying that was just the basis for what was to come.
“I think there will be a lot of events this year,” he said. “We already saw what happened last year. But a lot of that was preparatory.”
In 2021, the value of cryptocurrencies like bitcoin and ether skyrocketed, as some investors looked for a hedge against the high inflation seen around the world. Rising mainstream interest has fueled retail demand across the market, as data shows that global cryptocurrency adoption is up more than 880% on the year.
But cryptocurrencies in general have been on the decline in recent weeks. When asked if he sees a return to bitcoin in 2022, Bankman-Fried was somewhat optimistic.
“Things that basically make me optimistic are more regulatory clarity in the United States and the world, which I think can help a lot, and institutional adoption,” he said. “I think those are also related to each other.”
The crypto billionaire also gave his perspective on when developments can be expected in a digital asset regulatory framework.
“I think you will probably see the first batch of it appear in 2022,” he said, adding that the stablecoin sector in particular could get some groundwork.
Bankman-Fried also touched on the metaverse – a futuristic virtual landscape in which people can interact, buy non-fungible tokens or even date – which has attracted a lot of interest from Wall Street institutions. He said the metaverse could take some time to materialize and become a fully fledged technology.
“My expectation is that we may see at least a relative lull when talking about some of the pure NFT activity that we’ve seen recently – unless and until we see big names of players and partners come into the space,” he said. “But I expect it will, and it will be supercharging for the next part of Web3’s growth.”
Read more: Veteran Wall Street trader turned crypto expert explains how Bitcoin and Ethereum could hit $80,000 and $7,500 — and shares the six major trends on his radar for the next year