The Blurred Lines Between Tradition and Encryption: A Major Shift in the Financial World

A seasoned investor who has been navigating the A-share market for nearly twenty years once sneered at Bitcoin, believing it to be a scam without any "fundamentals." However, recently he has developed a strong interest in encryption currencies, inquiring about Bitcoin ETFs and Meme coins.

As the prices of Bitcoin and Ethereum hit new highs, the once clearly defined lines between stock investors and cryptocurrency enthusiasts are beginning to blur. Cryptocurrency supporters are more frequently spreading their ideas to the outside world, while traditional stock market investors are quietly starting to allocate some digital assets.

This transformation is not accidental. On one hand, the White House, Wall Street, and regulatory bodies have begun to actively engage in the encryption field; on the other hand, encryption companies are proactively seeking compliance and collaboration. After Bitcoin reached new heights, the barriers between the encryption and traditional markets have clearly loosened, and the two-way integration is accelerating.

Traditional power accelerates entry into the encryption field

The changes this year are particularly significant. It is not just the people within the encryption circle who are entertaining themselves; more forces from outside the circle are actively getting involved. Capital is betting, policies are loosening, and votes are leaning. These "outsiders" are no longer mere spectators; they are ready to truly participate.

Although you may not have directly purchased encryption, the stocks you invested in are likely associated with the "crypto circle". During the night trading session of the US stock market on July 16, encryption concept stocks collectively rose, with increases ranging from 5% to 40%. These companies either directly hold Bitcoin, Ethereum, and other encryption assets, or their business involves blockchain mining, trading platforms, etc. Companies related to encryption, which were originally on the fringes, have now become the leaders in the market.

The political arena has also shown a positive attitude towards cryptocurrency. A certain political figure has expressed support for cryptocurrency during their campaign and while in office, publicly stating the goal of making the United States the "crypto capital". After winning the election, they promptly signed an executive order and replaced several regulatory officials who held negative views on cryptocurrency. Meanwhile, Congress is actively advancing multiple pieces of cryptocurrency legislation, including a regulatory framework for stablecoins and an overall regulatory framework for crypto assets. Although these bills have not yet been officially enacted, they have at least entered the formal process, indicating that the cryptocurrency industry will move towards a clearer regulatory environment.

Traditional financial institutions have always recognized the value of encryption assets, but previously lacked stable policy expectations. Once this uncertainty is diminished, their speed of entering the market is much faster than expected. Several well-known internet brokers have started to test the waters for encryption asset trading services. A large bank has even announced the launch of a digital asset platform aimed at institutional clients, providing physical delivery trading services for Bitcoin and Ethereum, becoming the first large bank in the world to do so.

In addition, many globally renowned financial institutions are also actively laying out plans in the encryption field. A large bank has confirmed that it is researching the launch of a "stablecoin" for internal settlement and customer transactions; another bank launched a digital currency for inter-institutional payments back in 2020 and has this year partnered with a certain encryption trading platform to develop a "quasi-stablecoin" token, allowing large institutions to hold the bank's deposits directly on-chain.

Public companies have also begun to heavily allocate encryption assets. The world's largest independent BI company has been continuously purchasing Bitcoin since 2020, and currently holds over 600,000 coins, worth approximately $73 billion at current prices, showcasing impressive profitability. The company's CEO tirelessly promotes Bitcoin in various occasions, viewing it as the best tool to combat inflation and store value. Driven by this, more and more public companies are beginning to follow suit. For instance, a certain American gaming company announced that it would use Ethereum as its main reserve asset, planning to buy approximately 74,600 ETH between June and July 2025. As of July 17, 2025, its total holdings have reached about 321,000 ETH, making it the public company with the largest Ethereum holdings in the world. The company even raised $413 million through issuing new shares, almost all of which was invested in Ethereum, using 99.7% of its holdings for staking to generate income.

Traditional capital has begun to publicly enter the encryption market. For many traditional users, there are still thresholds and concerns regarding the direct purchase and custody of cryptocurrencies, while ETFs address this issue, allowing traditional capital to enter the encryption market in a compliant manner. In early 2024, U.S. regulators approved the first batch of Bitcoin spot ETFs, and several large Wall Street institutions subsequently issued their own Bitcoin ETFs. These ETFs allow users to trade Bitcoin and other encryption assets in their securities accounts just like buying and selling stocks. In July 2025, the U.S. welcomed the first batch of Ethereum spot ETFs, further opening up the connection channel between traditional finance and the encryption world.

The encryption industry is actively breaking barriers and integrating into the mainstream financial system.

Corresponding to the traditional forces entering the encryption field, the crypto industry is also striving to break circles, attempting to expand its influence from the currency circle to a broader mainstream world. This is mainly reflected in two aspects: first, cross-border cooperation of brands and ecosystems, allowing encryption elements to appear in traditional sports, entertainment, and other scenarios; second, global compliance layout, obtaining licenses and qualifications in various places, and integrating into the mainstream financial system.

Encryption companies are trying various ways to break out of their small circles, and the most direct way is to leverage mainstream entertainment and sports events to appear on the international stage. High-profile occasions such as F1 racing, the Premier League, Hollywood movies, and NBA games have all seen the presence of encryption brands. A certain encryption trading platform sponsored an F1 team while also placing its logo on the jersey of a Premier League team; even in an F1-themed movie starring a Hollywood celebrity, the racing suit he wore and the car he drove both featured the platform's logo. Another encryption exchange once placed an expensive advertisement during the Super Bowl, and another platform directly obtained the naming rights to a certain NBA team's home court. The intention behind these cross-industry marketing efforts is clear: to help encryption brands break free from self-indulgence within their own circles and enter the mainstream recognition system.

To truly break through the circle, relying solely on brand exposure is not enough; it is more important to gain mainstream trust and regulatory recognition. Therefore, in recent years, major encryption giants have invested resources to apply for compliance licenses in key global markets and build a legal operating framework. A certain encryption exchange went public on NASDAQ in 2021, becoming the first publicly listed encryption exchange, backed by years of continuous investment in compliance. The exchange has obtained financial service licenses from multiple states in the US, a virtual currency license from New York, as well as relevant qualifications from Europe, the UK, and other regions, creating a comprehensive compliance network. Another encryption trading platform is also actively promoting its global compliance layout. In early 2025, the platform reached a settlement with relevant US authorities, paving the way for its return to the US market, and has successively obtained important licenses from Dubai, Singapore, the EU, and other places, basically opening up the compliance entrance to mainstream markets in the Asia-Pacific, Europe, and the US.

Many exchanges that have risen during the Web3 wave are now starting to address their compliance shortcomings. Although they were not among the earliest to focus on compliance, their attitude and direction have become clear. This is not only for legal operation but also represents a new watershed in the industry: platforms that can truly develop in the long term will not compete based on marketing methods, but rather on whether they can operate sustainably within the regulatory framework. Platforms that possess licenses will have the opportunity to enter the competitive field of traditional finance, while those lacking licenses may be limited to small circles.

In addition to enhancing influence through brand promotion and compliance layout, the encryption industry itself is also continuously innovating. Products like certain encryption wallets are committed to creating a Web3 entry point, allowing ordinary users to easily experience blockchain services. More importantly, an increasing number of encryption protocols are beginning to promote the development of RWA (Real World Assets) on-chain, enabling users to buy and sell traditional financial assets such as specific company stocks or bonds on the blockchain. This is not only an innovation in gameplay but also opens the door for more global users to participate fairly in traditional finance. In the past, purchasing stocks from certain countries might have required cumbersome procedures, but now, with on-chain tokens, many encryption users can participate more conveniently.

The encryption industry is actively taking the initiative to break through barriers: enhancing brand influence through cross-industry cooperation, gaining mainstream trust through compliant operations, and bridging the connection between reality and virtuality through product innovation. These efforts have already begun to show results. Nowadays, you can see advertisements for encryption companies in places like Times Square in New York and on the streets of London; ordinary people can also easily access decentralized financial services through mobile wallets.

The Collision of the Crypto World and the US Stock Market: Who Will Change Whom?

When the crypto world meets the US stock market, one question quietly becomes important: Is the crypto world trying to bring encryption concepts into the mainstream, or is the traditional industry beginning to re-recognize Web3?

The encryption industry emphasizes the on-chain native trading logic, asset liquidity, and the possibilities of open finance, aiming to reshape financial infrastructure. For example, the rise of decentralized finance allows anyone to lend, trade, and manage finances without relying on banks, which poses a direct challenge to traditional banking practices. Furthermore, stablecoins, known as the "digital cash" of the encryption world, have already demonstrated potential in cross-border payments and trade settlements. These all show the breakthroughs of encryption technology on traditional financial infrastructure: transactions can be conducted continuously around the clock, settlements can be completed in seconds, and anyone with internet access can participate, no longer constrained by the operating hours and entry barriers of traditional institutions. It is foreseeable that the underlying architecture of the future financial system may gradually shift towards blockchain.

As encryption attempts to change tradition, traditional powers are also profoundly changing encryption. The most obvious is the intervention of regulation: governments and financial regulatory agencies around the world are accelerating the formulation of regulations for cryptocurrencies, incorporating them into existing regulatory frameworks. In addition, the large-scale entry of traditional capital may also change the power dynamics in the encryption field. When Wall Street giants become the largest holders of Bitcoin, and when the boards of publicly listed companies decide to include Ethereum in their balance sheets, the pricing power and discourse power of the encryption market have, to some extent, shifted to traditional institutions. This is somewhat ironic for the initial advocates of decentralized, anti-authoritarian encryption idealism, but it is an inevitable process that the industry must undergo to go mainstream.

For the encryption industry, gaining traditional recognition means a larger user base and funding pool; for traditional finance, embracing encryption innovation can improve efficiency and expand business boundaries. Therefore, rather than saying who breaks through whom, it is better to say that a new stage of bilateral integration has arrived. In this process of integration, two keywords run through it — innovation and compliance. Only by insisting on innovation can new value and growth points be continuously created to attract attention from outside the circle; only by embracing compliance can mainstream trust and support be obtained, integrating into the existing system. The two complement each other and are indispensable.

On one hand, innovation is the fundamental driving force for breaking through obstacles. Since its inception, the encryption industry has relied on continuous technological and model innovations to promote development. From Bitcoin's decentralized ledger to Ethereum's smart contracts, and then to the endless emergence of new concepts such as decentralized finance, non-fungible tokens, and decentralized autonomous organizations, each innovation has expanded the industry's boundaries and attracted new participants. At the current stage, the industry needs truly disruptive killer applications. This could be a completely new financial service model that makes traditional finance look pale in comparison; or it could be a platform that connects the real world, making ordinary people's daily lives more convenient due to blockchain. For example, if ordinary people can easily complete cross-border payments of digital assets using stablecoins through encryption applications, with transactions settling in seconds and fees nearly zero, then traditional remittance businesses will need to innovate, and a large number of users from outside the ecosystem will naturally flock into the encryption ecosystem. Alternatively, when blockchain-based identity verification and data sharing mechanisms are widely applied, people will no longer need to repeatedly submit cumbersome proof materials, significantly improving efficiency. Even if these users do not participate in cryptocurrency transactions, they will have already become a part of the blockchain world.

On the other hand, compliance is a necessary condition for breaking the deadlock. If the encryption industry wants to truly break its boundaries, it must solve the trust issue, and compliance is the key to building trust. In the past few years, we have seen too many cases caused by a lack of regulation.