The global financial system, TradFi, exceeds $30 trillion, encompassing various sectors such as banking and asset management. In contrast, DeFi, despite its revolutionary impact on finance, remains a mere fraction at about $150 billion. This discrepancy indicates early-stage development and potential for future growth. DeFi has successfully recreated essential banking functions on-chain, yet its growth has primarily attracted crypto-native users rather than institutions. Integration between TradFi and DeFi is necessary for scaling. BlackRock's adoption of Bitcoin ETFs represents a significant step towards bridging this gap and enhancing institutional access to digital assets.
DeFi's footprint barely scratches $150 billion on a good day, which is less than half a percent of TradFi's scope.
Already, we've seen DeFi recreate core banking functions entirely on-chain, including borrowing, lending, insurance, trading, asset management, and structured products.
TradFi must integrate with DeFi, not just observe it. Not to co-opt it, but to scale it.
BlackRock has become the single largest TradFi driver of crypto adoption, managing over $87 billion in spot bitcoin and other products.
#traditional-finance #decentralized-finance #crypto-adoption #financial-integration #institutional-investment
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