The Prospects and Challenges of Large-Scale Adoption of Crypto Assets

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

Despite the accelerating popularity of these technologies, the concepts of blockchain technology and Crypto Assets such as Bitcoin and Ethereum are widely known but have not yet been truly utilized by the majority of people. This phenomenon may stem from several main reasons:

1. Institutional investment channels are restricted.
2. Ordinary users face difficulties entering the market.
3. Lack of investment products suitable for the public
4. The entry barrier for developers is high
5. The infrastructure is insufficient to support large-scale applications.

However, even during the current market downturn, some positive signals have emerged that are conducive to the acceleration of Crypto Assets adoption.

1. Bitcoin Spot ETF: A New Channel for Traditional Funds

The U.S. Securities and Exchange Commission (SEC) recently extended the review period for Bitcoin spot ETF applications. Industry insiders are optimistic about its approval prospects, expecting it to be approved within 4-6 months.

The launch of a Bitcoin spot ETF will greatly simplify the process of investing in Bitcoin. Considering that the US stock market is dominated by institutional investors, accounting for 55%, the listing of a Bitcoin spot ETF may not only attract potential investors from the mainstream stock market but, more importantly, provide convenience for large institutional investments.

It is estimated that the assets managed by Bitcoin-related products have reached $28.8 billion. Based on this, industry predictions suggest that the listing of Bitcoin spot ETFs could bring about $30 billion in new demand.

2. Mainstream Payment Platforms Launch Stablecoins: A New Way to Popularize Crypto Assets

A globally renowned mobile payment company recently launched its own US dollar stablecoin on the Ethereum network for transfers and payments. This initiative marks the first formal entry of a large fintech company into the digital currency payment space.

The stablecoin is 100% backed by deposits in US dollars, short-term US Treasury bonds, and similar cash equivalents. Users can use this stablecoin for peer-to-peer payments, merchant payments, and to exchange with other supported Crypto Assets.

The goal of this payment giant is to become a bridge between traditional finance and Web3, promoting mainstream adoption of stablecoin payment systems. With its massive user base, it is expected to bring tens of millions of new users to the Crypto Assets industry.

3. The Rise of Real World Assets (RWA)

In the past six months, RWA has become a hot topic in the market. Supporters believe that RWA will introduce real-world assets and yields, significantly increasing the asset scale of Crypto Assets. Although there are still challenges in the tokenization and settlement of off-chain assets, some innovative solutions have already emerged.

Opponents are concerned that most RWA projects still rely on centralized compliance and auditing processes, making it impossible to fully achieve trustlessness.

Regardless, RWA provides a starting point for traditional financial institutions to participate in and co-build the Crypto Assets ecosystem. As traditional institutions gradually enter this field, we may need to give them some time to adapt and innovate.

4. Support for Multiple Programming Languages in Blockchain

Currently, the development of Web3 programming languages is showing two trends:

1. Explore new languages optimized for specific application scenarios, such as the Cairo language suitable for zero-knowledge proof applications, and the DeepSEA functional programming language that emphasizes security.

2. Develop a blockchain platform that supports multiple programming languages to attract more Web2 developers. This approach may help significantly increase the number of Web3 developers from the current hundreds of thousands to potentially millions.

Both of these trends contribute to the development and innovation of the industry.

5. The maturity of infrastructure paves the way for large-scale applications

The Ethereum ecosystem has developed a rich array of Layer 2 scaling solutions, such as Optimism, Arbitrum, and StarkNet, which significantly improve network performance.

In addition, modular blockchain technology is also rapidly developing, with multiple projects providing support for large-scale blockchain applications in their respective fields.

Compared to previous cycles, the current development of Crypto Assets infrastructure has made significant progress, creating conditions for the birth of large-scale blockchain applications.