EDAS 2024 Highlight Series: The State of Enterprise Adoption of Digital Assets

Welcome to the EDAS Highlight Series! Each week, we’re diving into one of the highest-rated sessions from this year’s conference.

Want to watch the full video? All session recordings are available for on-demand viewing and CPE credit at Bitwave University. 

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EDAS Highlight Series: Session #1

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In a powerful opening keynote address at the Enterprise Digital Asset Summit (EDAS), Bitwave CEO and Co-Founder Pat White outlined a compelling vision for the future of digital assets in the enterprise space. 

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From the macro trends driving adoption to the regulatory landscape and emerging technologies, this presentation gave a comprehensive view of the industry's current state and future trajectory.

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Today, we're unpacking the key takeaways from this exciting keynote and exploring a range of topics –  like institutional investment trends, regulatory developments, the rise of staking and re-staking, and the potential impact of zero-knowledge proofs. 

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Industry Strength Indicators

The on-chain industry has always been marked by volatility. But, over the last year, there have been some clear signals of strength: 

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• A survey by Coinbase found that 56% of companies are working on on-chain projects, indicating a significant increase in blockchain adoption.

• There was a 2.6x year-over-year increase in stablecoin usage on-chain, suggesting a rise in payments and transactions using digital assets.
• The approval of eight Ethereum (ETH) exchange-traded funds (ETFs) is a significant event, expected to drive institutional investment in ETH. Trading began on July 23, 2024. 

• The approval of ETH ETFs is expected to lead to a net inflow of $5 billion in the first 18 months, with $107 million already flowing into ETH on the first day of trading.

• The Bitcoin ETF has attracted $63 billion in assets under management within a few months of its launch.

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Regulatory Landscape and Legal Developments

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The recent regulatory landscape has seen new guidance and regulations from the Financial Accounting Standards Board (FASB) and the Internal Revenue Service (IRS).

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The FASB guidance (ASU 2023-08) has provided clarity on some aspects of accounting for digital assets – like fair value measurement and new disclosures for in-scope crypto assets. But it has also left some areas ambiguous. 

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Bitwave has kept a close eye on these developments and continued to updated our platform to ensure customers are always compliant with the latest regulations. 

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Positive legal developments for the crypto space include the dismissal of investigations against Paxos, Hiro, Stacks, and Consensys – along with a favorable ruling for Ripple in one case.

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However, Uniswap and MetaMask have received Wells notices from the Securities and Exchange Commission (SEC) regarding their swap activities. The legal developments surrounding Uniswap are expected to be a significant focus in the coming year.

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And, finally, the US Congress marked a significant milestone recently, with the passing of the Financial Innovation and Technology for the 21st Century Act (FIT21) bill, which aimed to clarify regulatory guidance around crypto. While the legislation is not expected to pass the US Senate, it was passed in the House with strong bipartisan support.

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Emerging Trends in the Crypto Space

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Staking and re-staking are key trends in the crypto space for 2024, with enterprises using them as a first point of access to digital assets. Re-staking, which involves buying into a liquid staking protocol and then restaking the tokens for additional yield, has seen significant inflows, reaching $8 billion. However, institutional interest in restaking has been slower to catch on compared to traditional staking activity. 

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Web3 social is another emerging trend, with enterprises likely to follow users into these networks, requiring them to purchase Ethereum (ETH) for advertising slots.

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The rise of enterprise-focused blockchains is a continuing trend, with more discussion expected in the coming year. Enterprise blockchains are focused on smart contracts, payments, and other business use cases.

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Institutional blockchains, like Canton, are focused on high-volume settlement layers, which is a perfect use case for blockchain technology.

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Zero-Knowledge Proofs and Their Applications

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Zero-knowledge (ZK) proofs are a technology that is gaining popularity and have the potential to enable private payments on-chain. 

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ZK protocols could enable true privacy in transactions, allowing users to transfer assets without revealing their account balances. While this technology is still under development, it has the potential to revolutionize enterprise payments and smart contracts. They can be used to create private payments on-chain, which could address major adoption concerns for businesses.

Real World Assets (RWAs) and Crypto Payments

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The term "Real World Assets" (RWAs) has evolved to encompass tokenized versions of traditional assets, such as T-bills, rather than just physical assets like Rolexes or Ferraris. This shift has led to increased participation from traditional financial institutions like BlackRock and Franklin Templeton, who are seeking to leverage the liquidity and efficiency of the cryptocurrency ecosystem.

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Crypto payments are experiencing significant growth and are poised to disrupt the traditional payments industry due to their speed, cost-effectiveness, and overall efficiency.

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Developer Activity and Ecosystem Health

The number of developers contributing to the cryptocurrency space has increased significantly, particularly during the 2022 bull market. While the number of new developers has decreased since then, a core group of experienced developers continues to contribute consistently.

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The Ethereum Shanghai upgrade was successful, resulting in a plateau of stakers and validators, indicating a healthy ecosystem.

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Predictions & Trends for 2025

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• Crypto payments will continued to be a significant trend.

• The next year will continue to be significant for betting markets, with platforms like Polymarket experiencing explosive growth.

• Yield-bearing stablecoins are expected to gain traction in 2024, offering a compelling use case for crypto payments.

• Central bank digital currencies (CBDCs) are expected to see increased adoption over the next 12 months.

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The most exciting shift is the introduction of the "Web 2.5 experience" – characterized by account abstraction, which simplifies user interactions with crypto by abstracting away the complexities of wallets and transactions. 

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Thanks to stronger retail acceptance, innovative security features and better UI, millions of people will make their first interaction with Web3 without even realizing it.

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Earn CPE for this Session!

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Catch the full EDAS magic by watching this session recording – professionally recorded live in Nashville. Plus, you can earn  valuable, NASBA certified CPE from this session, too.

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It's all available on-demand, 24-hours a day at Bitwave University.

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Just sign up for a free account and explore this session, plus many others available to grow your digital asset finance knowledge.