Beyond Blockchain — Crypto-based Solutions for Institutional Investors are Evolving
Bitcoin and Cryptocurrencies in 2021
It took over 10 years, but the astronomical growth of the cryptocurrency space toward the end of 2020 and during Q1 2021 was a watershed moment for Bitcoin and other cryptocurrencies. Bitcoin appreciated from a low of about $7,000 in January 2020 to a high of almost $30,000 by the end of the year — a record soon eclipsed when Bitcoin hit an all-time-high of almost $65,000 in April.
Since its inception over 10 years ago, decentralized ledger technology has been met with skepticism, criticism, and disbelief, and it has been fought with by regulation and outright banning. However, you cannot stop an idea whose time has come. The inefficiencies, inequalities, and centralization seen in traditional finance are untenable, and the world is ready for change.
Marching Toward Mass Adoption
The issue now, however, is that mass adoption is only possible once large, institutional players make the plunge toward new innovations, and that is something that — thankfully — we are finally seeing.
On a global scale, enterprises have been moving to adopt or invest in crypto payments and blockchain technology. The race is on to navigate the complex terrain of decentralized and centralized synergy as evidenced by partnerships and announcements made in the past three months, by some of the largest brands in the world.
In March, Visa and PayPal both announced they would accept crypto payments, but with major differences. Visa has only approved the use of USDC payments, while PayPal’s announcement was a promise to provide users with the ability to use cryptocurrencies in commerce, and also send them to whatever destination.
In April, J.P. Morgan, Mastercard, and UBS poured $65 million into Ethereum startup studio ConsenSys. In May, NYDIG, a subsidiary of a $10 billion asset management firm, said it would provide crypto buy, hold, and sell services to its clients, and U.S. Bank, Wells Fargo, Silvergate Capital, Signature Bank, and JPMorgan Chase — some of the most recognized names in the financial industry — have all created or are planning to create and provide their clients with crypto-based products and services.
At the same time, blockchain-powered financial services products (commonly referred to as decentralized finance or DeFi products) have also matured, providing investors with seamless, secure, fast, and low-cost access to a wide range of crypto-based investment opportunities. From about $1 billion locked in DeFi investments in June 2020, there was almost $90 billion locked in DeFi smart contracts in May 2021 — an increase of almost 9,000%.
Future Challenges and Opportunities
We are now near a tipping point, and we expect to see the crypto and blockchain spaces quickly overcome the remaining obstacles standing in the way of mass adoption. In addition to the entry of institutional players into the crypto space and easy access to investment tools and opportunities, supporting services are now being built on decentralized frameworks. For example, we see many asset custody and corporate governance operations now moving from centralized to decentralized models. However, it is not easy to shift institutional players and legacy systems from their current models to decentralized models, but that is where flexible, enterprise-grade custom solutions such as Unido come into play.
Unido — Bringing Blockchain-Powered Decentralization to Traditional Finance
Unido bridges the gaps between cryptocurrency-powered DeFi and traditional, fiat-based finance. Two key Unido offerings are Unido Enterprise Platform and Unido Institutional.
Unido Enterprise Platform
Unido Enterprise Platform (EP) helps crypto-native firms, asset management firms, hedge funds, and other players in the finance space seamlessly and securely manage their assets. It is a highly efficient application that combines institutional compliance and governance services with access to DeFi networks. The EP Dashboard gives users insight into wallets, customers, and firm assets — all in one place — thereby empowering better, smarter, more streamlined crypto-asset investment, management, trade, and operations.
Unido Institutional (Unido Insto) is a full-stack cryptocurrency bank-in-a-box that helps banks, brokers, exchanges, and custodial service companies provide crypto banking facilities similar to those provided by traditional banks. It functions as a stand-alone crypto bank and can be easily integrated with legacy fiat systems and centralized CRMs.
Unido Insto brings the power of the Unido platform to traders and businesses looking for access to DeFi and cryptocurrency investment opportunities.
With Unido Insto, users can diversify their holdings, manage their assets, securitize offerings, collateralize crypto assets, manage crypto loans, and enjoy unparalleled security thanks to Unido’s proprietary multi-sig technology.
Unido Ecosystem Growth
At the end of March, Unido announced a new partnership with EQI Bank, a global digital banking service that chose Unido as its institutional partner for blockchain solutions. EQI Bank will use a customized version of Unido Insto and Unido’s key signing technology to deliver crypto custody and trading products to EQI Bank clients.
Unido also recently entered into a partnership with Moonstake to spread awareness and accelerate the adoption of blockchain and distributed ledger technologies globally. Moonstake was launched in August 2020 and currently holds over $800 million in staked assets. With its proprietary staking protocol, Moonstake and its network of partners aim to be the largest staking pool network in Asia.
Finally, in June, Unido partnered with Flourishing Capital to deploy a decentralized custody solution to users of Flourishing Capital’s AI-driven predictive volatility indicator. The Flourishing.AI market analysis platform collects over 20GB of data every day on crypto wallet balances and transactions to analyze capital inflows and outflows to predict price flow impacts on major cryptocurrencies. This type of analysis empowers data-driven investment decisions, and the partnership between Unido and Flourishing Capital opens up new applications, competencies, and opportunities to Unido users.
The direction that the finance industry is heading is clear. Centralized systems that secure maximum benefits to an elite few are being rapidly replaced by open, transparent, democratic, and fair decentralized systems that are powered by the blockchain and can be accessed by anyone. Enterprise blockchain platforms such as Unido, with highly performant cryptocurrency custody, risk management, and blockchain security services on offer, are paving the way forward — not just for tech-savvy crypto enterprises but for traditional financial institutions, managers, hedge funds, and more.
For more on Unido’s suite of enterprise blockchain solutions and to learn more about how Unido is helping to bring about a revolution in traditional finance, please visit https://www.unido.us/.