Author: Gino Matos, CryptoSlate
Translated by: Shaw Golden Finance
Bitcoin and cryptocurrencies seem poised for mainstream acceptance, with inflows into U.S. spot exchange-traded funds (ETFs) hitting record highs. Goldman Sachs holds more shares of the BlackRock-issued cryptocurrency ETF than any other institution, and corporate finance departments from Strategy to Bitmine are also embracing digital assets.
However, a recent survey by Bank of America found that three-quarters of global fund managers still firmly refuse to venture into digital assets.
Max Gokhman, the Deputy Chief Investment Officer at Franklin Templeton, stated that the seemingly contradictory data does not stem from regulatory uncertainty or operational complexity, as these obstacles have largely been resolved.
In an interview, Gokhman stated that this imbalanced data arises from fear, misunderstanding, and the industry's deeply rooted belief in legitimate investments.
Gokhman has been observing 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 existed."
Management Paradox
Fund managers take pride in fulfilling their fiduciary duties, but this protective mindset creates a paradox: the desire to protect client assets prevents them from accessing the investment opportunities their clients increasingly crave.
According to Gokhman:
"One aspect of good asset management is understanding client needs. From individual clients to institutional clients, there is increasing interest in digital assets, but they find that their investment managers are not providing relevant solutions."
This resistance stems from some deeply rooted misunderstandings. One perspective views it as complete over-speculation with no value; another holds that there is a lack of knowledgeable personnel to create legitimate investment solutions utilizing digital assets.
Meme Coin Trap
When Gokhman encounters skeptical colleagues, the conversation always follows a predictable pattern. Senior figures in traditional finance 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 returns to purely speculative tokens.
His reaction has become quite natural:
"Just because you invest in stocks, does it mean you only buy those low-priced stocks traded on the OTC market? 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 hesitate to engage with Bitcoin, which has never missed a payment in 15 years.
Although fund managers are still debating the legitimacy of cryptocurrencies, the market has quietly shifted. The data Gokhman cites debunks the retail-dominated narrative: 89% of Bitcoin transactions on exchanges exceed $100,000. He emphasizes:
"That's not retail money. The market is becoming increasingly institutionalized."
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 millions of client channels but are unaware of client needs.
Gokhman asked these players whether they have inquired with their clients about wanting cryptocurrency. He added:
"They may have an account on Coinbase, holding most of their wealth there. And you haven't grasped these situations at all."
Traditional advisors often find that their clients' wealth is dispersed across multiple platforms, while portfolios managed by professionals do not even include the digital assets that clients have accumulated on their own.
Franklin Templeton's breakthrough lies in interpreting blockchain concepts in traditional financial language. When analyzing Solana, they did not invoke revolutionary rhetoric but instead calculated discounted cash flow.
Gokhman explained:
"If, like Solana, every transaction incurs an actual fee, we can predict the growth of these transactions. These are the cash flows of the future. We can discount them to the present."
This approach demystifies digital assets by applying a familiar analytical framework that any investor with basic valuation training can understand.
It all comes down to returns
As the Federal Reserve approaches interest rate cuts, Gokhman sees an opportunity. The return rates from traditional sources are continuously declining, and institutions are facing increasing pressure to generate revenue, while cryptocurrencies can provide 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 considered that the government might just cancel all debts directly? Because I've been through that situation."
Recent guidelines from the U.S. Securities and Exchange Commission (SEC) regarding liquid staking could be a turning point. This is the first time that regulated products can provide staking yields without directly holding cryptocurrencies.
Gokhman predicts that if cryptocurrency ETFs supporting staking are approved, this resistance will not persist indefinitely. He forecasts:
"When we can provide returns, I believe this will drive more adoption."
This shift could suddenly accelerate. Institutional adoption typically follows a pattern: sustained skepticism exists until competitive pressures force large-scale action.
A significant cryptocurrency gap remains between the 75% of fund managers adhering to traditional frameworks and the growing alliance recognizing that client service needs to embrace technological change.
The question is not whether this gap will narrow, as economic pressures will ultimately compel all parties to accept it. The question is which managers will lead the trend and which will scramble to catch up.
