Analysis of the Prospects for Large-Scale Adoption of Crypto Assets

The widespread application of new technologies often requires a long development process. Taking the United States as an example, it took 78 years for cars to reach a 92% penetration rate, 48 years for household electricity to achieve full coverage, and the internet reached an 88% penetration rate after 26 years of development.

Although concepts such as Bitcoin, Ethereum, and blockchain have become widely known globally, most people have still not actually used related services. The main reasons for this phenomenon may include the following aspects:

1. Institutional funds are limited in their entry channels.
2. The access channel for ordinary users is not smooth.
3. Lack of investment targets that meet the needs of the general public
4. The entry barrier for developers is relatively high.
5. The infrastructure is still insufficient to support large-scale applications.

However, during the current market downturn, some positive signs are emerging that could help Crypto Assets achieve widespread adoption more quickly.

1. Bitcoin Spot ETF: The Institutional Capital Entry Channel is About to Open

The U.S. Securities and Exchange Commission (SEC) has recently extended the review period for Bitcoin spot ETF applications. The industry generally holds an optimistic view on the prospects of Bitcoin spot ETF approval. Some industry insiders expect that the Bitcoin spot ETF may be approved within the next 4 to 6 months.

The listing of a Bitcoin spot ETF will significantly simplify the process of investing in Bitcoin. The U.S. stock market is primarily dominated by institutional investors, with mutual funds and other institutional investors accounting for 55%. Currently, several large mutual funds are actively promoting the approval of Bitcoin spot ETFs. Once approved, this will not only attract potential investors from mainstream stock markets such as Nasdaq, NYSE, and CBOE, but more importantly, it will provide a convenient entry channel for large-scale institutional funds.

It is estimated that the launch of a Bitcoin spot ETF could bring about $30 billion in new demand.

2. Stablecoins: The entry channel for ordinary users is widening

Recently, a globally renowned mobile payment company launched a US dollar stablecoin for transfers and payments on the Ethereum network. The company covers 202 countries and regions, supports 24 currencies, and has over 400 million monthly active users.

This 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 exchanges with other Crypto Assets.

The company's goal is to become a bridge between fiat currency and Web3, promoting the application of stablecoin payment systems in mainstream markets. With its large user base, this initiative is expected to bring tens of millions of new users to the Crypto Assets industry.

3. Tokenization of Physical Assets: The Entry Point for Traditional Institutions into the Crypto Assets Ecosystem

In the past six months, the tokenization of Real World Assets (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 some challenges in the tokenization and settlement of off-chain assets, the industry has already developed several settlement mechanisms based on collateral, staking, arbitrage, and gaming.

Opponents argue that most RWA projects still rely on centralized compliance and auditing processes, failing to achieve complete trustlessness, which does not align with the core理念 of Crypto Assets.

Despite the controversy, RWA may become the preferred way for traditional large institutions to participate in and co-build the Crypto Assets ecosystem. As traditional financial institutions begin to enter the Crypto Assets market, RWA may play an important role in the next market cycle.

4. Blockchain with Multi-language Support: Attracting Web2 Developers

Currently, the Crypto Assets industry is showing two trends in programming languages:

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

2. Develop blockchain platforms that support multiple programming languages to attract more Web2 developers. Currently, the number of Web3 developers is around several hundred thousand, while Web2 developers exceed ten million. Blockchain platforms that support multiple programming languages are expected to attract more Web2 developers, thereby creating a more prosperous ecosystem.

5. The infrastructure is gradually improving, and large-scale blockchain applications are ready to take off.

The Ethereum ecosystem has developed a series of Layer 2 scaling solutions, such as Optimism, Arbitrum, StarkNet, zkSync, Polygon, Scroll, and Taiko. These Layer 2 solutions show significant improvements in performance compared to the Ethereum mainnet.

In addition, the modular blockchain field is also rapidly developing. Projects such as Celestia, Polygon Avail, and Rooch are expected to support large-scale blockchain applications in their respective domains.

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