The fourth Crypto Finance Conference in St. Moritz has come to an end. Event participants agreed that crypto finance needs to integrate into the established financial industry to continue to thrive.
The fourth Crypto Finance Conference in St. Moritz (CFC) took place last week. It claims to be „the most private crypto finance and blockchain conference for investors,“ and is application-only. In the breathtaking setting of St. Moritz, crypto-entrepreneurs and -experts meet investors, trying to convince them of the new asset class.
This year, Young Sohn, President of Samsung Electronics, Eva Kaili, the key figure behind Blockchain regulation in the EU, and Thomas Moser, crypto-expert at the Swiss National Bank (SNB), were among the speakers. However, the stars at this year’s events were the brothers Tyler and Cameron Winklevoss, who made a fortune with early-stage Bitcoin investments.
A stronger sense of reality
Compared to 2018, when the crypto-winter was the dominant theme on almost every crypto conference, this year’s conference was all about the industry gaining momentum and moving forward – which coincided nicely with the current Bitcoin price rally.
What has also changed – other than the mood and wallet size of the event participants – was an overall consensus that the crypto industry can only continue to thrive if it finds its way into the traditional financial system.
In other words, it needs a functioning legal framework and cooperation with established financial institutions. In Liechtenstein and Switzerland, that has long become common knowledge. Liechtenstein has introduced its Blockchain Act and Switzerland is currently amending existing legislation. Both aim at creating a legal basis to integrate digital currencies into the financial system.
The Swiss financial markets regulator Finma has already granted banking licenses to the first crypto banks; more are underway. In Liechtenstein, Bank Frick has provided crypto services for several years.
While governments and the banking industries in Liechtenstein and Switzerland have invested in know-how, partnerships, and infrastructure, in most countries, that is not the case.
The institutional “breakthrough” is still about to happen
Cameron Winklevoss used his speaking slot to lay out his vision of a decentralized financial system and the empowerment of people. Today, he and his brother operate the exchange platform Gemini that also works with Goldman Sachs.
Being based out of the U.S., the Winklevoss brothers understand the regulatory struggle, as U.S. regulators have so far been hesitant to take the new asset class seriously. Nevertheless, the brothers believe institutional investors are on the brink to enter the crypto market with the breakthrough about to happen in 2020.
This “breakthrough,” however, has already been about to happen for a long time. “Once institutional money arrives, prices will go through the roof,” has been a repeating theme on crypto-conferences since 2017. Yet, it still hasn’t happened.
And it probably won’t. Instead of a big-bang-like breakthrough, it’s more likely that institutional investors are carefully and slowly leaping into the asset class, with small volumes at first. The first pension funds and banks have already invested. But for now, the asset class is still way too small to appear on institutional investors’ radars. That could change over the coming years, but we’re not there yet. Niklas Nikolajsen, the founder of Bitcoin Suisse, believes that institutional investors will start to get interested once Bitcoin reaches a volume of $500 billion – compared to about $200 billion today.
The Crypto Finance Conference is somewhat representative of the small size of the asset class. A Finews report described it as a “family gathering of crypto- and Blockchain-entrepreneurs, -investors, -experts, -incubators and -aficionados.”