The Digital Asset Market in the Eyes of Financial Giants: Current Situation and Future

In a recent in-depth conversation, the head of ETF and index investment at a global asset management giant shared her unique insights on digital asset ETFs, market modernization, and the integration of blockchain technology with traditional finance. The executive, who manages trillions of dollars in assets, believes that financial markets are in a critical transition period.

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Modernize your marketplace

The executive describes himself as a “market modernization enabler” who works to strengthen market resilience, increase transparency and expand investor engagement. She believes that ETFs are a disruptive technology in their own right, which is consistent with the goal of blockchain technology: to modernize the market and enable innovation and transformation in the financial market. She pointed out that technological innovation has always been the cornerstone of market modernization, and this pattern has not changed for thousands of years.

Integration of blockchain with traditional marketplaces

Executives said that they are currently in the stage of integration of blockchain assets with traditional financial markets. The launch of the U.S. BITCOIN ETP marks an important watershed moment, but it is also just the beginning. These Bitcoin ETPs bridge the gap between the crypto world and the traditional financial world, positively impacting participants in both worlds.

The data shows that many investors are first exposed to this product category through Bitcoin ETPs and have since expanded to other ETPs. This convergence currently involves only a small number of crypto assets and relies on traditional financial infrastructure. Executives believe that the ideal way forward is to create bridges and learn from best practices, rather than completely disrupting existing systems.

Technological Evolution and Market Transformation

Executives used the shift from dial-up to broadband internet as a metaphor for the current development of crypto assets. There are two perspectives on the future development of cryptoassets:

1. Current Phase (“Dial-up” Phase)
2. Future Vision (“Broadband Era”)

She raised a key question: Is the vision of complete decentralization truly the best fit for the current market and investors? Analyzing from the necessity of balance, she suggested using crypto technology to improve trust mechanisms rather than completely replacing intermediaries.

Development of the options market

The development of the options market has brought new trading mechanisms to cryptocurrency ETFs. Although there are many sources of price information in the cryptocurrency market, by introducing volatility tools to exchanges and listing for trading, the market has achieved the standardization of the way money is invested, the measurability of volatility trends, and the real-time monitoring of trading conditions.

The development of the options market has expanded the diversity of market participation methods, which is reflected in the standardization of trading methods, the improvement of price discovery mechanisms, the increase of risk management tools and the improvement of market liquidity.

Metrics for Measuring ETF Success

Executives pointed to some misconceptions between the crypto community and the traditional financial sector, particularly regarding the performance evaluation of Bitcoin ETFs and Ethereum ETFs. She emphasised that the primary criterion for judging the success of an ETF is its ability to achieve its intended goals.

Measures of ETF success include tracking accuracy and market quality. She noted that both Bitcoin and Ethereum ETFs exhibit good market quality, despite differences in inflows. This difference is mainly due to differences in investor sentiment and investment philosophy, rather than the performance of the product itself.

ETF Trends and Future Outlook

Regarding the future development of ETFs, the company hopes to see the research on Bitcoin in portfolio construction continue to deepen, and the focus of the discussion should shift from “whether to invest in Bitcoin” to “how to use Bitcoin wisely in the portfolio”. Another important development is the launch of Bitcoin ETP options, an innovation that helps to create more balanced trading dynamics.

Looking ahead to 2025, the company is focusing on three core areas: the establishment of basic definitions, the clear delineation of jurisdictions, and the establishment of public-private partnerships. They believe the industry is entering a possible “golden age”, largely due to lower-cost block space, a more convenient development environment, and a clearer regulatory outlook.