Transcribed and edited by Ivan, Aki WuBlockchain
At Bitcoin Asia 2025 in Hong Kong, CZ delivered a sequence of remarks reviewing Bitcoin’s evolution over the previous decade, assessing the present wave of institutional adoption, observing regulatory shifts in the United States, and outlining prospects for future traits similar to treasury corporations (DAT), real-world property (RWA), and AI. The highlights included: Bitcoin’s path from early-stage ecosystem to institutional adoption; capability as the core constraint on Bitcoin scaling; institutionalization and clearer regulation as main tailwinds for the business; the rise of DAT entities bringing new capital whereas warranting warning on governance and cycle threat; and RWA and AI as necessary future drivers for crypto.
Bitcoin’s Decade in Overview: From a BTC-Centric Business to Institutional Adoption
CZ: I recall that in early 2014 the Apple App Retailer eliminated the final remaining Bitcoin pockets app — the one from blockchain.com, which at the time was referred to as blockchain.information — and there have been viral movies about it on YouTube. So, from 2014 — or actually from 2013 after I entered the area — we’ve come a great distance. From 2013 up till round 2017, the area was largely referred to as the Bitcoin business; we didn’t actually name it “blockchain” or “Web3.”
In 2017 Ethereum took off, ushering in ERC-20 tokens and the ICO increase. 2021 marked DeFi Summer time. In the present day we see participation from conventional monetary establishments, together with Bitcoin ETFs. Bitcoin is changing into a world reserve crypto asset, and I imagine that in the future it’ll develop into a world reserve forex. We’ve witnessed this evolution, and it’s encouraging to see conventional finance, nations, and states adopting Bitcoin and different cryptocurrencies. We actually have come a great distance.
Bitcoin itself, nevertheless, has some limitations. It has grown considerably, however given its block-size constraints and robust dedication to decentralization, Ethereum emerged as the programmable compute/smart-contract chain; different blockchains turned meme-focused chains, whereas others specialised in liquidity/buying and selling use instances, and so on. Totally different chains now serve completely different functions, with many further improvements underway. We’ve tried bringing a variety of these improvements again to Bitcoin — some efforts have succeeded, others not. Even so, Bitcoin stays the largest cryptocurrency by market capitalization and the gold customary of the business. We’re in a extremely revolutionary section, and personally I hope to see many of those improvements ported again to Bitcoin.
Technical Bottleneck: What’s the core problem to scaling to billions of customers?
CZ: The primary concern is capability. In the present day Bitcoin nonetheless processes round seven transactions per second (TPS). There are completely different approaches to handle this — Layer-2 options, for instance. However Layer-2s themselves require counting on and trusting a 3rd celebration to some extent, which will increase centralization. If we’re going to try this, we’d as properly construct extra centralized infrastructure straight on the Bitcoin community.
I actually imagine capability is the binding constraint. We want methods to maintain rising it sustainably. That is one in all decentralization’s trade-offs: upgrades are very gradual and fairly painful. In 2017 we had the block-size wars, which produced a number of Bitcoin forks. I dislike Bitcoin forks — purely from an operational standpoint: as a service supplier, you have to help many various forks and wallets to maintain serving customers, and the workload is gigantic.
So whereas I wish to see Bitcoin proceed to progress quickly, I additionally hope to keep away from extreme forking. I feel the business nonetheless bears some scars from these block-size and scaling years.
Institutional Adoption: Why is TradFi’s Entry a Main Tailwind?
CZ: I imagine that is extremely useful for BTC. A small subset of die-hard crypto followers might say they don’t need nation-states and centralized actors getting into the area. However in a decentralized world, anybody can take part — a person, a bunch, a nation-state, an organization. Everybody ought to be capable to participate, and the extra participation the higher. Why wouldn’t we welcome them? They create extra capital, funding, recognition, credibility, and use instances — for my part, the extra the higher.
As soon as nation-states start contemplating nationwide crypto reserves, they need to additionally think about regulation. They may drive clearer guidelines. Whereas in a decentralized world one can argue “it’s all software program” and few additional guidelines are wanted, having guardrails makes it a lot simpler for market individuals to know what they will and can not do. I see all of this as very optimistic, and we’ve additionally seen value motion mirror it.
Bitcoin is close to its all-time excessive. Roughly 9 months in the past it was round $50,000–$60,000; even with immediately’s pullback, or the volatility over the previous week, it stays inside 5–10% of its all-time excessive (ATH). We additionally see different cryptocurrencies — similar to Ethereum and BNB — buying and selling close to their highs. Worth motion clearly signifies that institutional adoption is an effective factor.
World Regulatory Panorama: A U.S.-Led Pattern Towards Globalization
CZ: I’m truly fairly shocked by how rapidly the United States has adopted so many issues. I attribute this to the Trump administration — they’ve moved very quick, and I feel they’ve acquired robust help from the business. Bitcoin Journal has helped loads there, and many different crypto individuals have pitched in as properly. About 9 months in the past, a number of different international locations had been in the lead — together with the UAE, which was very forward-looking. However now I imagine the U.S. is setting the tempo on openness and forward-looking regulation. Even yesterday or this morning, the CFTC stated it might be contemplating permitting U.S. residents to commerce on worldwide platforms — a significant growth. From conversations I had this morning, it appears this will even have been an older rule that’s merely being introduced extra to the forefront.
All of that is very optimistic, and the U.S. has such outsized affect in world markets that different governments now have to contemplate how to not be left behind. I’m positive the UAE is making an attempt to go additional — extra crypto-friendly and extra revolutionary. We’re additionally seeing Hong Kong genuinely open up. Three days in the past I used to be in Tokyo, and they’re additionally working laborious to embrace crypto in a strong approach. So I feel the U.S. is successfully prompting each regulator and nationwide chief round the world to assume critically about crypto and blockchain. That’s wonderful for our business.
I don’t imagine I absolutely perceive the full implications of what’s permitted and what will not be. Traditionally, this has been a thorny concern. Personally, I bumped into vital bother with the U.S. authorities as a result of, in the early days, our platform had U.S. customers and we had not accomplished the applicable registrations and associated necessities. I hope the world can develop into a single open economic system, which means anybody ought to be capable to transact with anybody else. Anybody ought to be capable to make investments and elevate capital anyplace in the world. In fact, there will probably be sure constraints, similar to authorized restrictions associated to sanctioned international locations, however the fewer such constraints, the higher the world economic system will probably be. I’m an advocate of a world economic system — I’m a businessman, not a politician; I don’t carve out spheres of affect. We should always try for as open an economic system as doable, and blockchain know-how can readily allow this.
What we’d like is regulatory permission, and I additionally firmly imagine we should replace legacy rules to suit a extra globalized world. I perceive that every nation wants to guard and develop its personal economic system. We have now borders and corresponding guidelines, however the extra transactions that may happen amongst individuals throughout the planet, the extra assets we’ll collectively have and the stronger the economic system will probably be. With a stronger economic system, we will accomplish better issues — similar to going to Mars and curing most cancers.
The Rise of Treasury Firms (DATs): Opportunities, Risks, and Two-Method Convergence
CZ: On treasury corporations (DATs), I feel they’re wonderful for crypto — and for Bitcoin particularly. What advantages Bitcoin advantages the broader crypto business as properly. Past Bitcoin, we’re seeing many different cryptocurrencies comply with the MicroStrategy playbook, with treasury corporations targeted on BNB, Ethereum, and others. The normal fairness market is way bigger than crypto — particularly in the United States, the place I imagine 90–95% of capital is institutional and managed by establishments. In different international locations the share is decrease, however in the world’s largest economies most property sit in institutional fingers. Thus far, aside from ETFs, these establishments haven’t been capable of take part in crypto at true scale.
Now, publicly listed treasury corporations supply extra choices and range. ETFs are extra like index/basket merchandise — and you pay charges. Treasury corporations let many individuals who beforehand couldn’t purchase crypto achieve crypto publicity by buying the inventory of a listed firm. In impact, we’re bringing the fairness market to crypto — or bringing crypto to the fairness market, relying in your vantage level. At the identical time, we’re making an attempt to introduce crypto into the huge fairness markets not solely in the U.S., but in addition in Hong Kong, Japan, and basically any nation with a inventory market. This opens a small asset class to a much wider viewers.
One other vector is asset tokenization — RWA. It’s nonetheless in its early stage, so there are points, however the incontrovertible fact that it’s occurring is optimistic as a result of it means we will finally resolve them. In the present day we will tokenize stablecoins, Treasury payments, commodities, buildings, actual property — nearly something — and even individuals. I additionally imagine AI will significantly profit crypto. Most individuals don’t but understand what number of transactions AI will generate, and that it’ll accomplish that in a programmable method. To transact autonomously, AI wants programmable cash, whereas immediately’s fiat currencies — whether or not USD, HKD, or CNY — are usually not programmable. In consequence, AI will leverage cryptocurrencies to create an infinite variety of transactions that individuals haven’t but anticipated. Briefly, we’re bringing a broad vary of property into the crypto world. These domains reinforce each other: the concepts aren’t new, however they’re regularly being realized. We’re seeing treasury corporations elevate a whole bunch of hundreds of thousands — even billions — of {dollars} and channel that capital into crypto, and that is changing into extra widespread.
That stated, there are dangers. Some might attempt to use treasury corporations opportunistically — for instance, a listed firm that merely holds some crypto or Bitcoin to pump its personal share value, which is clearly undesirable. Many such corporations additionally lack strong governance for dealing with digital property. Some undertake extra complicated buildings that maintain a basket of crypto property — who maintains that basket, and who performs the rebalancing? Others might go additional and make investments the raised capital into crypto corporations, which is a completely completely different line of enterprise. There may be nothing inherently fallacious with these approaches, however every treasury firm should be assessed case by case.
Totally different companies require completely different ability units. There will probably be failures on this space; not each treasury firm will ship multi-bagger returns. Lastly, we’re presently in a bull market, however markets are cyclical: a crypto winter will come, adopted by a bear market — costs might fall and volatility will improve. Most treasury corporations might want to reside by not less than one winter to common into positions over time and maintain a decrease common price foundation. MicroStrategy went by this course of: the first cycle was fairly painful, however they’re in a robust place now as a result of their blended price foundation is low. A market winter will probably arrive inside a couple of years — we’ll all undergo cycles. Maintain that in thoughts and perceive the dangers.
For my part, two issues might occur. First, when extra capital flows into an asset, it usually turns into extra steady and much less unstable. Basically, the bigger the market capitalization — the bigger the complete worth of that asset class — the extra steady it’s. For instance, you probably have a $100 million asset, token, or listed firm and somebody buys $10 million price of its shares, the value will transfer up. However if you buy $10 million of NVIDIA inventory — now an organization price three to 4 trillion {dollars} — the value barely budges. The bigger the asset and its market cap, the decrease the volatility. It’s primary physics: a much bigger ship is steadier.
Second, smaller-cap property carry a lot larger threat. Basically, it’s essential to look at what the token — or the basket of tokens — truly represents, and whether or not the underlying ecosystem is really growing. In different phrases, is the underlying token’s utility genuinely rising? Naturally, the newer the asset, the larger the threat. Extra mature and bigger ecosystems have a tendency to hold much less threat, although their tempo of enchancment could also be slower — relying in your perspective. Newer tasks might supply larger threat and larger return, whereas extra established ones could also be the safer selection.
General, better inflows do assist stabilize markets. At the identical time, a lot of the capital is coming from the inventory market, the place there are many speculative merchants. That market is extremely liquid — which is sweet for liquidity — however it’s also a buying and selling venue, so in the quick time period costs might swing extra sharply. Over the long term, nevertheless, that is web optimistic and ought to finally development towards better stability.
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