FTX; Marianne Ayala / Insider
- FTX CEO Sam Bankman-Fried said that institutional adoption of cryptocurrencies could accelerate in 2022.
- The pace of adoption depends on the level of regulatory clarity in the US and globally, he told Bloomberg on Monday.
- Much of the level of activity in the crypto industry in 2021 was "preparatory," the billionaire said.
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Cryptocurrencies can expect to see more institutional adoption in 2022, but whether it's a tidal wave or a trickle will depend on what happens on the regulatory front, according to FTX chief Sam Bankman-Fried.
The CEO of the cryptocurrency exchange 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 digital asset regulation will dictate the pace of adoption by financial institutions.
"Especially if we feel like they're getting clarity, that could come in a tidal wave, it could come in a trickle," he said. In an interview released Monday.
Still, don't expect a quick entry within the next six months, at least, as institutions need time to onboard new platforms and assets.
"It's going to be a long process that will probably take a few years," he said, adding that the size of the market could be "really huge."
"I have spoken with all the big banks, all the big investment banks, pension funds; they are all looking at the sector. Many of them have begun to open paths in their activities in it, but it is slow and takes time."
A growing number of financial institutions, including Black rock, MasterCard, Y Visa, have already introduced offerings related to cryptocurrencies. Some financial advisors Having recommended digital assets should be part of a portfolio, regardless of age.
Bankman-Fried, who launched the FTX crypto exchange in 2019, he pointed to activity in the crypto industry last year, saying that was just the foundation for what's to come.
"I think a lot is going to happen this year," he said. "We've already seen what happened last year. But a lot of that has been preparatory."
In 2021, cryptocurrencies like bitcoin Y ether gained in value as some investors sought a hedge against the high inflation seen all over the world. Growing mainstream interest fueled growing retail demand across the market, with data showing that global crypto adoption increased by a more than 880% in the year.
But cryptocurrencies in general have fallen back in recent weeks. When asked if he sees Bitcoin making a comeback in 2022, Bankman-Fried was somewhat optimistic.
"The things that make me optimistic are basically more regulatory clarity in the US and globally, which I think could help a lot, and institutional adoption," he said. "I think those are also related to each other."
The crypto billionaire also gave his take on when developments in a regulatory framework for digital assets can be expected.
"I think you'll probably see the first batch coming out in 2022," he said, adding that the stablecoin sector in particular could get some ground rules.
Bankman-Fried also referred to the metaverse, a futuristic virtual landscape where 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 time to materialize and become full-blown technology.
"I hope that we can see a cooling down, relatively speaking at least, of some of the pure NFT activity that we have seen recently, unless and until we see big names of players and partners enter the space," he said. "But I hope that happens, and that will be supercharging the next piece of Web3 increase."
