The crypto endgame is not Super Bowl commercials with Matt Damon – or Larry David. The crypto endgame is when everyone and their computer-illiterate grandparents not only use crypto, but feel totally safe and comfortable interacting with the crypto ecosystem.
That’s a pretty high goal, but it’s not just important, it’s vital. A day in the spotlight seems nice, but it’s not going to make the world-changing difference that crypto is tailor-made for.
If crypto is just something everybody has heard of, that could lead to more users in the short term. And in fact, that’s pretty much what just happened in 2021.
But that’s not hyper-adoption, that’s just being overbought. Then, you get one bad day of price action, one day where the media totally overreacts, and the weak money that barely knows what crypto even is, and who probably made some starting plays that I could have told them were bad ideas, are all gone. The classics get punished just as badly as the scam coins.
No, if you want lasting gains in crypto, you need a comfortable user base that knows what they’re dealing with, and has the confidence to stick through some bad times. That means customers who are crypto users, not just crypto speculators.
That’s why I’m very excited to be seeing one of my favorite cryptos, Cardano (ADA), taking another step forward thanks to Sygnum Bank AG, a Zürich-based Swiss bank that specializes in digital assets. In fact, Sygnum is the world’s first chartered digital asset bank – leave it to the Swiss, right?
Sygnum is adding staking service for institutional customers who hold Cardano with their bank.
Now, I can hear you ask, “So what?” And, sure, it’s not the most electrifying news – until you consider what it really means for every single person out there who owns ADA.
If you’re one of them, you need to know what’s happening. And if you’re not one of them, go and buy ADA now, and then come back and check this out…
Why Institutions Like Sygnum Matter – A Lot
Now, we just talked about why Cardano is one of my favorite cryptos, and why it’s proof-of-stake (PoS) validation method blows (most) traditional proof-of-work (PoW) crypto validators out of the water.
This next development great because it helps cryptocurrency fit into a paradigm that institutions are used to: hanging onto assets. The institution owns Cardano, it stakes the Cardano, it makes a profit over time, just like income on a quality loan portfolio, or how a regular investor might pocket dividend payouts.
These institutions often lack the tech chops to hold these new kinds of assets in-house, securely. You don’t necessarily want your junior IT associate taking a stab at next-generation cryptographic security for tens of billions of dollars’ worth of assets you can’t hold in your hand.
The average person might think it’s convenient to cut out the middleman, but a big institution is functionally a tower made of paperwork, so they’re more comfortable having their crypto held by someone they can sue.
As big institutions have more reason to buy in, that’s going to smooth out volatility – somewhat – and drive up demand. More demand means better prices for everyone already invested. Not only that, but as long as institutions are making money staking Cardano, retail investors are going to want to feel like they’re getting in on the secret.
Of course, they’ll be late to the party, but I have a feeling they’ll make plenty of money; there’s incredible unrealized upside in ADA.
The widespread staking will also encourage a higher degree of crypto literacy. It will lead people to things like smart contracts and DeFi. In the long run, it will make people rethink the entire way they interact with wealth in the digital space. That’s a best-case scenario for Cardano, and the folks who own and use it everyday.