The cryptocurrency market is undergoing a significant transformation, with the primary beneficiaries of its growth shifting from legal professionals to the banking sector, according to a recent observation by Eric Turner, Head of Research at Messari. Turner, a prominent voice in crypto analytics, suggested a fundamental change in how value is captured within the industry. "Last cycle, lawyers made all the money in crypto," Turner stated in a social media post, adding, "This cycle its going to be bankers.
The previous crypto market cycle, particularly spanning 2021 and 2022, was largely defined by extensive regulatory scrutiny and numerous high-profile bankruptcies. This period saw a surge in demand for legal expertise as companies navigated complex compliance issues, faced enforcement actions from bodies like the U.S. Securities and Exchange Commission (SEC), and dealt with the fallout from major collapses such as FTX. Legal professionals played a critical role in guiding firms through litigation, restructuring, and navigating an uncertain regulatory landscape.
In contrast, the current cycle, beginning in late 2023 and extending into 2024, has been characterized by a significant influx of institutional capital and traditional financial players. A pivotal moment was the SEC's approval of spot Bitcoin Exchange-Traded Funds (ETFs) in January 2024, which opened the door for major asset managers like BlackRock and Fidelity to offer crypto exposure to a broader client base. This development has accelerated the integration of digital assets into conventional financial portfolios and services, leading to increased involvement from banks and other financial institutions.
This predicted shift signifies a maturation of the cryptocurrency market, moving from a phase dominated by regulatory uncertainty and legal challenges to one characterized by institutional integration and formalized financial products. As traditional finance embraces digital assets, bankers, asset managers, and financial advisors are poised to become central figures in facilitating investment and managing crypto-related ventures. The evolving landscape suggests a future where digital assets are increasingly intertwined with established financial systems, reshaping the industry's profit dynamics.