Five Major Barriers to the Mass Adoption of Crypto Assets and Signs of Breakthroughs

The widespread application of new technologies often takes a long time. For example, in the United States, it took 78 years for cars to reach a penetration rate of 92%, 48 years for household electricity to achieve full penetration, and the internet took 26 years to reach a penetration rate of 88%.

Although the concepts of blockchain and Crypto Assets have penetrated global public awareness, most people have not actually used related services. This is mainly due to five reasons:

1. Institutional capital entry channels are restricted.
2. Ordinary users have difficulty accessing the market.
3. Lack of investment targets that meet the needs of the public
4. Difficulty for Developers to Enter the Industry
5. The infrastructure cannot support large-scale applications.

However, some positive signals have emerged in the current bear market, which are expected to accelerate the mass adoption of Crypto Assets.

1. Bitcoin Spot ETF: The Entry Channel for Institutional Funds

Although the U.S. Securities and Exchange Commission ( SEC ) has extended the review period for the Bitcoin spot ETF application, the industry generally holds an optimistic attitude towards its approval prospects. The CEO of a well-known Crypto Assets company stated that, according to internal sources, the Bitcoin spot ETF may be approved within 4 to 6 months.

The listing of the Bitcoin spot ETF will make investing in Bitcoin more convenient. The US stock market is dominated by institutions, with mutual funds and other institutional investors accounting for 55%. The Bitcoin spot ETF not only has the potential to attract mainstream stock market investors but, more importantly, provides a channel for large-scale institutional funds to enter.

According to a data analysis firm, the launch of a Bitcoin spot ETF could bring an additional demand of $30 billion.

2. Large Payment Companies Launch Stablecoins: Entry Channels for Ordinary Users

A globally renowned payment company covering 202 countries and regions, supporting 24 currencies, and boasting over 400 million monthly active users, recently launched a USD stablecoin on Ethereum. This stablecoin is 100% backed by USD deposits, short-term U.S. Treasury bills, and similar cash equivalents.

The company has become the first large fintech company to embrace digital currency payment transfers. Users can use this stablecoin for peer-to-peer payments, merchant payments, and exchanges with other supported Crypto Assets.

This initiative is expected to bring millions of new users to the Crypto Assets space, serving as a bridge between fiat currency and Web3.

3. RWA Boom: Traditional Institutions' Entry Points into the Crypto Assets Ecosystem

In the past six months, real-world assets ( RWA ) have become a hot topic in the market. Supporters believe that RWA will introduce real-world assets and returns, significantly increasing the asset scale of Crypto Assets. Opponents, however, worry that RWA projects may not fully achieve decentralization, which goes against the spirit of Crypto Assets.

Despite the controversy, RWA may still become the preferred way for traditional large institutions to participate in building the Crypto Assets ecosystem. For example, a dollar stablecoin launched by a payment giant is actually a type of RWA that comes with the yield from U.S. Treasury bonds.

In the future, traditional institutions may need some time to explore opportunities for self-reform through blockchain and Crypto Assets.

4. Multi-Language Supported Blockchain: Attracting Web2 Developers

Currently, the Crypto Assets industry has two main directions in programming languages: one is to explore new languages for specific application scenarios, such as the Cairo language that supports ZK applications; the other is to develop blockchains that support multiple programming languages to attract more Web2 developers.

Blockchain platforms that support multiple programming languages help attract a large number of Web2 developers into the Web3 space. Currently, there are only hundreds of thousands of Web3 developers, while there are over ten million Web2 developers. This multi-language support solution is expected to create a more prosperous ecosystem.

5. Infrastructure is gradually improving: Paving the way for large-scale applications

In 2017, Ethereum founder Vitalik Buterin pointed out that technological barriers are the main factors hindering the large-scale application of blockchain, especially the scalability issue.

Today, the Ethereum ecosystem has developed a thriving Layer 2 scaling solution, such as Optimism, Arbitrum, and StarkNet, which significantly enhance performance. In addition, modular blockchain technology is also rapidly developing, with projects like Celestia and Polygon Avail expected to support large-scale blockchain applications.

Overall, compared to previous cycles, the current development of Crypto Assets infrastructure has made significant progress and is expected to support the emergence of large-scale blockchain applications.