Back at an event IRL at last; it was a great first day at CoinDesk's Consensus 2022 conference! Here are my top three takeaways from a day of panel sessions, networking, and conversations.

Check back for updates from day 2 later on! And get in touch if you're on the ground in Austin and want to say hello.

Cryptocurrency, as a financial asset class, is now mainstream

Like it or not, crypto is now an undeniable reality, at the retail level and most levels of institutional adoption, according to speakers on the New Models for Market Making, Custody and Other Institutional Demands panel.

“In all of the leadership suites across all of the legacy financial institutions, this is a top priority topic,” said Christine Moy, Managing Director, Apollo Global Management. 

Questions range from ‘how do we mobilize against this, to how are we mobilizing with this and how do we evolve?’  The point is, traditional institutional investment firms are investing in crypto, from what talent to put into place to what software is needed to integrate with or build it. 

That’s a big leap from just five or six years ago, according to Noelle Acheson, Head of Market Insights, Genesis Trading.

Back then, “the institutional involvement was basically limited to 'do we invest in Bitcoin, and if so, how much?' – that was it, those were the options available,” she said on the panel. 

Today, however, this industry is a “firehose of innovation and complexity, and all of us here are working to help push that complexity even further into the institutional realm,” she said. “Which is going to have impacts on traditional markets in ways that we are not really able to see [yet].”

But institutional ‘buy and hold’ mentality could do more harm than good

As more institutional investors get involved, custody becomes an increasingly important conversation for the evolution of the sector – perhaps more so than people are currently focused on.

As an industry, we should be focused on identifying what the best practices are to determine the trajectory of the impact of blockchain, panelists on the Investor Town Hall: Security, Reputation, ESG and Other Barriers to Institutional Adoption session agreed.  

“Many of these digital assets are designed to be engaging in an activity, and I think the default for institutions with legacy asset classes is to store them,” one panelist said. “And I think it limits the potential of what we're trying to build.” 

With respect to custody, it’s important to think about how smart contracts and digital assets can engage in the ecosystem and participate in the community, he said. “I think there are a range of outcomes, but they’re all positive. They're all improvements upon the existing system.”

Despite long-term optimism for crypto, the industry might be in for a ‘long winter’

“Let’s keep it real,” Apollo’s Christine Moy said. The next 12 months, from a macro economy perspective, is going to be really tough – and not just for crypto – for global markets as the Fed battles inflation.

So, “for all the people who are in it for the mission and not just for the money, take care of yourself, take care of your teams, [be] fiscally responsible,” she advised. “So that you survive what could be an extended crypto winter and that you come out the other end … being the core parts of the infrastructure and business ecosystem that we see on the other side, however long that may be.”