Written by Hosam Mahmoud
2023 has witnessed seismic shifts in both traditional and crypto landscapes. As the traditional world grapples with dynamics — such as bond yields and rising interest rates — the digital asset sector is also maneuvring around its own unique set of challenges.
At CCDAS, we’ll reflect on the most pressing themes and opportunities facing the sector today, while looking forward to what we can expect to see in the future. Below, we provide more details on some of the topics being covered.
1. What’s Next? Crypto’s Past, Present and Future
The historical performance of Bitcoin (BTC) following its halving events has painted a consistent narrative comprising three distinct phases: breakout, distribution, and accumulation. As the popular saying goes, history may not repeat itself, but it often rhymes. If history does rhyme, then the upcoming halving cycle, anticipated for April 2024, is poised to exert a substantial impact on the price of Bitcoin.
In this panel, we will reflect on the early roots of this still-nascent industry while casting our gaze forward as to what’s next for the sector. What lessons have we learned from the previous cycle? What trends should we look at? And most importantly, are we out of the water yet
2. How Institutions are Shaping The Digital Asset Landscape
At present, assets under management (AUM) held by financial institutions with a vested interest in cryptocurrency paints a highly encouraging picture for the industry.
With over $17 trillion in AUM, the significant influence that major traditional institutions can wield over digital assets is immense, especially considering that the AUM for digital asset investment products is relatively nascent, hovering around the $30 billion mark.
As institutional interest continues to grow, so does the influx of institutional-grade products, services, and solutions that are reshaping the industry. In this panel, we’ll explore how institutions are driving change within the digital asset sector and if improved infrastructure has set the stage for the next big leap in institutional adoption.
3. Beyond Crypto: Trends in Traditional Asset Tokenisation
The tokenisation of Real-World Assets (RWAs) on public blockchains is attracting growing interest from traditional and crypto-native institutions alike.
Larry Fink “the next generation for markets, the next generation for securities, will be tokenisation of securities”.
This sector has experienced tremendous growth, surging by 1333% since the start of 2022, and as of September 27, 2023, it has accumulated a Total Value Locked of $2.14 billion.
However, as this innovative approach gains traction, it’s clear that there are numerous complexities to navigate. In this panel, we’ll discuss the current efforts being made by industry players, the challenges that lie ahead and if the tokenisation of RWAs can disrupt traditional markets worth over $800tn.
4. Market Liquidity in Digital Assets: Challenges, Solutions, and the Path Forward for Institutions
The digital asset markets may be growing, but liquidity is nearing record lows. Since the beginning of the year, the market liquidity for BTC pairs has declined 27.6% to 6985 BTC from 5054 BTC.
The fragmented nature of these markets, which are spread across a myriad of trading venues, chains and liquidity pools, poses unique obstacles for institutions venturing into the sector.
Join us as top-tier market makers, exchanges, and trading firms tackle the pressing queries circling around digital asset liquidity. Where is it lurking? How can we direct more liquidity into digital asset markets? And how can bolstering liquidity enhance market trust and efficiency?
5. Decoding the Derivatives Market: Leverage, Exposure, and Balance in the Digital Asset Ecosystem
The derivatives market is seen as a cornerstone of the digital asset industry. Not only do derivative volumes far outweigh spot volumes, but the speculative nature of the market has driven people toward highly leveraged products and offerings. Based on the September data, the derivatives market accounts for 79.2% of the total trading volume on centralised exchanges.
Yet, these products offer more than just speculation; they provide a pathway for financial institutions to gain exposure to the digital asset markets through products like ETFs.
In this panel, we’ll cut through the noise and explore what high-leverage positions really mean for the broader crypto market. How can derivatives help institutional players gain digital asset exposure? And can we strike a balance between accelerated growth and managed risk?
6. ESG and Crypto: Sustainable Practices in the Digital Asset Landscape
Environmental, Social, Governance. Hardly any subject has been hovering in the institutional investment space as much as ESG factors and socially responsible investing (SRI). In our upcoming panel, we’ll examine the role of digital assets within the context of sustainable investing, exploring ESG challenges and opportunities presented by the crypto market and addressing the key questions and concerns that ESG-focused investors currently face.
We’ll also discuss CCData and CCRI’s recent ESG Benchmark, which has been created to provide a novel lens through which the industry can discern an asset’s ESG exposure, as well as support the development of industry-first ESG indices and financial products.
7. The Future of CBDCs & Digital Money
We are increasingly witnessing a growing convergence between traditional finance, digital assets and digital currencies. Today, the market cap of stablecoins has grown to $124 bn.
As these worlds converge (or collide, depending on one’s viewpoint), will the increasing existence of digital fiat currencies — be they stablecoins or CBDCs — also enhance the cryptocurrency market or will they pose a threat to it?
What potential do tokenized deposits have for maintaining commercial banks’ credit creation abilities whilst also leveraging the capabilities and benefits offered by digital currencies? What roles will these different types of digital money play in the future? And how can we ensure that any future ecosystem of new forms of digital money is effective, diverse and competitive in delivering benefits to both consumers and markets?