Written by: Gino Matos, CryptoSlate
Translated by: Shaw Jinse Finance
Bitcoin and cryptocurrencies seem poised for mainstream acceptance, with record inflows into U.S. spot exchange-traded funds (ETFs). Goldman Sachs holds more shares of cryptocurrency ETFs issued by BlackRock than any other institution, and corporate finance departments from Strategy to Bitmine are embracing digital assets.
However, a recent survey by Bank of America shows that three-quarters of global fund managers still firmly refuse to engage with digital assets.
Max Gokhman, Franklin Templeton's Deputy Chief Investment Officer, states that these seemingly contradictory data do not stem from regulatory uncertainty or operational complexity, as these barriers have largely been addressed.
In an interview, Gokhman stated that this imbalanced data stems from fear, misunderstanding, and the industry's difficulty in relinquishing its deeply ingrained belief in legitimate investments.
Gokhman has been watching how traditional finance responds to the digital asset revolution for years. He points out:
The biggest reason is that it often takes time for a mature industry to realize it has fallen behind. This fear of the unknown has always been present.
Management Paradox
Fund managers pride themselves on fulfilling their fiduciary duties, but this protective mindset creates a paradox: the desire to safeguard client assets prevents them from accessing the investment opportunities that clients increasingly crave.
According to Gokhman:
One aspect of good asset management is understanding client needs. Both individual and institutional clients are more interested in digital assets, but they find that their investment managers are not providing relevant solutions.
This resistance stems from some entrenched misunderstandings. One viewpoint considers it purely over-speculation with no value; another viewpoint holds that there is a lack of knowledgeable personnel to create legitimate investment solutions using digital assets.
Meme Coin Trap
When Gokhman encounters skeptical colleagues, the conversation always follows a predictable pattern. Senior figures in traditional finance tend to view meme coins as representative of the entire cryptocurrency ecosystem, exposing what he calls a superficial understanding.
Just as the stock market encompasses everything from blue-chip dividends to speculative biotech stocks, digital assets range from mature protocols that generate actual income to purely speculative tokens.
His reaction has become quite natural:
Just because you invest in stocks, does that mean you only buy those low-priced stocks traded on the pink sheets? There are many companies in high-yield bonds that most rational investors would avoid. Most asset managers will tell you they hold emerging market stocks and distressed debt. This is a key asset class for them.
Gokhman emphasizes that this skepticism is selective. Fund managers feel comfortable with Venezuelan bonds, which have defaulted multiple times, yet shy away from Bitcoin, which has never missed a payment in 15 years.
Although fund managers are still debating the legitimacy of cryptocurrencies, the market has quietly changed. The data cited by Gokhman punctures the narrative of retail dominance: 89% of Bitcoin transactions on exchanges exceed $100,000. He emphasizes:
That's not retail money. The market is increasingly becoming institutional.
Educational Challenges
Franklin Templeton's response includes a three-tiered outreach campaign targeting central bank officials, institutional intermediaries, and retail investors. The crucial middle layer consists of large brokerage firms and platform owners, who control channels to millions of clients yet know nothing about client needs.
Gokhman asks these players whether they have asked their clients if they want cryptocurrency. He adds:
They might have an account on Coinbase and keep most of their wealth there. And you don't have a grasp of this at all.
Traditional advisors often find clients' wealth is scattered across multiple platforms, while portfolios managed by professionals do not include the digital assets clients have accumulated themselves.
Franklin Templeton's breakthrough lies in interpreting blockchain concepts using traditional financial language. In analyzing Solana, they did not invoke revolutionary rhetoric but calculated discounted cash flows.
Gokhman explained:
If every transaction, like with Solana, incurs an actual fee, we can predict the growth of these transactions. These are the future cash flows. We can discount them to the present.
This approach demystifies digital assets by employing a familiar analytical framework that any investor trained in basic valuation can understand.
It all comes down to yield.
With the Federal Reserve nearing interest rate cuts, Gokhman sees an opportunity. Returns from traditional income sources are declining, while institutions face increasing revenue pressure, and cryptocurrencies can offer an alternative.
According to him:
Everyone needs income. Staking is a clear way to generate income. When someone tells me they worry that all this (cryptocurrency) is a scam, have you thought about whether the government would just cancel all debts? Because I have experienced that.
The recent guidelines from the U.S. Securities and Exchange Commission (SEC) regarding liquid staking could be a turning point. For the first time, regulated products can offer staking yields without the need to hold cryptocurrencies directly.
Gokhman predicts that if cryptocurrency ETFs that support staking are approved, this resistance will not last indefinitely. He predicts:
When we can offer yields, I believe that will drive more adoption.
This shift could suddenly accelerate. Institutional adoption typically follows a pattern: sustained skepticism exists until competitive pressure forces large-scale action.
A significant cryptocurrency gap remains between the 75% of fund managers adhering to traditional frameworks and the growing alliance recognizing that customer service needs to embrace technological change.
The question is not whether this gap will close, as economic pressures will ultimately drive acceptance from all parties. The question is which managers will lead the way and which will scramble to catch up.
