Recently, the prediction made by Paul Atkins, the chairman of the U.S. Securities and Exchange Commission (SEC), has once again become a focal point in the market. In a recent statement, he pointed out that within the next two years, the U.S. financial market, including stocks, bonds, government securities, and real estate, with a total value exceeding $50 trillion, will fully migrate to a blockchain technology architecture. This action is seen as the most significant structural change since electronic trading began in the 1970s, indicating a profound contradiction between the traditional financial system and the emerging blockchain technology.
Inefficiency of Traditional Finance
In the few mature markets, the inefficiency of the traditional financial system has become increasingly apparent. Funds in the financial market often remain in a "sleeping state," failing to flow effectively or be fully utilized, leading to insufficient market liquidity. Traditional settlement processes, such as the DTCC clearing system, are severely lagging in efficiency, with programmable collateral management expected to release over $100 billion in "sleeping capital" annually. These issues directly impact investor returns and the overall operation of the market. Moreover, net settlement has reduced trading volume by as much as 98%, prompting the industry to consider how to leverage new technologies to enhance settlement efficiency and drive higher capital utilization.
Tokenization Reshaping DTCC Infrastructure
Tokenization is undoubtedly a powerful remedy for the aforementioned issues. Atkins mentioned that tokenization will not only increase settlement speed but is expected to shorten the existing settlement cycle from T+1/T+2 to nearly T+0 or even seconds, significantly reducing transaction costs and enhancing liquidity. In this new architecture, infrastructures like the DTCC will undergo fundamental reshaping, with priority allocation becoming more flexible, which is undoubtedly a positive signal for market participants. As the market gradually accepts this change, more capital inflows are expected, accelerating the tokenization process of various assets.
Market Reactions and Diverging Opinions
However, the path to tokenization is not without its challenges. While closely monitoring this event, the views of renowned investor Ray Dalio have added more uncertainty to the market. He pointed out that due to the transparency of transactions and the risk of being hacked, cryptocurrencies like Bitcoin do not meet the conditions for large-scale holdings by central banks and institutions. This perspective starkly contrasts with the SEC's optimistic expectations, leading to a complex market reaction: smart money is beginning to withdraw, and some institutional investors are inclined to build more conservative investment strategies.
Meanwhile, on social media, the reverse operations of whales and the spread of FOMO sentiment have further amplified the market's expectations and anxieties regarding regulatory benefits. Just as the market's brand image begins to take shape, whales reveal that their short positions in Bitcoin have reached $120 million, raising various concerns that have become the focus of public attention.
Details of Current Market Dynamics
Another noteworthy market dynamic is that the total market value of Hong Kong's virtual asset spot ETFs has increased by 33% compared to last year, with the market share of Huaxia Fund's ETF reaching 38%, reflecting a gradual increase in overall market acceptance of digital assets. Additionally, the SOL-USD trading volume on the Solana chain has surpassed the total spot trading volume of Binance and Bybit for three consecutive months, showcasing a strong contrast between decentralized finance (DeFi) and intermediary services.
The actual trading data in the market intertwines with these dynamics, demonstrating that blockchain is rapidly penetrating the strategies and practices of traditional financial markets. Many investors cannot ignore that, despite the challenges ahead, the overall positive momentum in the industry is clearly visible.
Risk Assessment and Defect Analysis
While facing significant changes, the market must also be vigilant about challenges that tokenization may trigger, such as privacy paradoxes and systemic risks. These issues compel many participants to seek a balanced adaptation amid the transformation. As Atkins mentioned, this shift appears to be a tremendous opportunity, but it conceals various risks that must be confronted. Furthermore, the specific implementation timeline and details of the SEC's "Project Crypto" initiative have yet to be disclosed, which may lead to misunderstandings and confusion regarding its future development.
The essence of this structural change is far more than just a technological iteration; it represents a redistribution of power. This is yet another confrontation between the old forces and the new order on the new battlefield of the crypto world. Market participants must face this scenario with caution and courage.
Conclusion
With the SEC's bold predictions for the financial market, tokenization is expected to spark a revolution in the coming two years. Investors should pay attention to the upcoming changes and potential opportunities. All of this indicates that the widespread adoption of blockchain technology will have a profound impact on market structure and capital efficiency. Where the future will lead is uncertain, but every move made by core participants will determine the next shape of the financial market.
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