Chainlink co-founder says Bitcoin ETFs will fuel mass institutional adoption Chainlink co-founder says Bitcoin ETFs will fuel mass institutional adoption
The onset of Bitcoin ETFs could signify a transformative era for traditional banking and DeFi, notes Chainlink's Nazarov.
2 min read
Updated: Dec. 25, 2023 at 4:10 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Chainlink co-founder Sergey Nazarov believes a spot Bitcoin ETF will create a path for institutions to buy Bitcoin en masse, eventually leading to more blockchain products and services.
Nazarov shared his insights during a recent interview with CNBC, discussing the transformative potential of blockchain technology in the traditional finance (TradFi) sector.
Nazarov’s perspective comes at a crucial time when the lines between decentralized finance (DeFi) and traditional financial systems are increasingly blurring, especially with the potential approval of Bitcoin ETF applications mere weeks away.
TradFi’s growing engagement
The Chainlink co-founder said the launch of Bitcoin ETFs backed by giants like BlackRock is a clear indication of TradFi’s growing influence in the blockchain and DeFi realms. He added that TradFi will play a significant role in the development of blockchain technology and the cryptocurrency industry once these ETFs hit the floor.
According to Nazarov:
“Considering the size and user base of the entities creating these ETFs, their impact on our industry could be substantial.”
Long an advocate for heightened collaboration between TradFi and blockchain, Nazarov sees traditional capital markets as the primary customers and buyers in the cryptocurrency world. He believes the advent of products like Bitcoin ETFs marks the start of a deeper integration.
Nazarov said:
“Blockchain technology is fundamentally about enhancing transactions to make them more transparent, less risky, and more efficient, aligning with the core principles of banking, capital markets, and asset management.”
Product revolution
Bitcoin ETFs are considered an initial, efficient step for larger market players to facilitate public access to cryptocurrencies. However, Nazarov predicts a future where this integration goes much further.
He anticipates the development of more sophisticated financial products and envisions major financial players crafting their own DeFi protocols, which would interact with existing protocols on public chains.
Nazarov also highlighted the importance of infrastructure in this burgeoning ecosystem. He stated:
“Our role is to build the necessary infrastructure to enable seamless interactions among Web3 protocols, capital markets protocols, and crucially, between Web3 and traditional capital markets.”
Nazarov’s comments during the CNBC interview provide a compelling vision of a future where blockchain and traditional finance coexist and actively collaborate to forge a more transparent, efficient, and secure financial landscape.
This emerging collaboration is poised to revolutionize the DeFi and traditional finance sectors, heralding a new era of financial innovation and inclusivity.
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Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Chainlink
$15.1361
Chainlink is a decentralized oracle network that connects smart contracts on the blockchain to real-world data.
Sergey Nazarov began his career building peer-to-peer marketplaces, going on to the investment team at FirstMark Capital.
