Fusion and Opportunities: How Are TradFi Users Transitioning to Crypto Investments?

The total Bitcoin holdings of publicly listed companies worldwide have surpassed 1,000,000 coins, worth nearly $96 billion. This is not only a revolutionary change in corporate asset allocation but also reflects a fundamental shift in the traditional finance (TradFi) world’s perception of cryptocurrencies.

Traditional investors no longer see crypto assets merely as marginal speculative tools but as an indispensable part of diversified portfolios.

01 User Profile: Who is Transitioning from Traditional Stock Markets to the Crypto World

Gate’s user profile quantitative research report reveals that platform users are mainly male, middle-aged, and young adults with extensive investment experience but relatively low account assets. This profile significantly overlaps with many traditional investors, especially in terms of investment experience and adaptability to emerging markets.

The path for traditional investors to shift into the crypto market is becoming clearer. On one hand, they allocate assets through direct cryptocurrency trading; on the other hand, an increasing number of listed companies are beginning to include cryptocurrencies on their balance sheets, forming the so-called “Digital Asset Reserve Treasury” (DAT) model.

This model was pioneered by Strategy, a US-based company, and currently, global listed companies have accumulated Bitcoin worth over one billion dollars.

In the Hong Kong market, listed companies hold approximately 20,000 coins (including 4,810 Bitcoin and 15,190 Ethereum). At current prices, the total value is about HKD 3.6 billion.

Unlike pure digital asset companies, these firms generally adopt a “core business + coin hoarding” hybrid strategy rather than “ALL IN” on buying coins.

02 Drivers of Change: The Dual Appeal of Wealth Effect and Asset Diversification

The main drivers for traditional investors to move into the crypto market come from two dimensions: first, the intuitive stimulation of wealth effect; second, the urgent need for asset diversification.

Regarding wealth effect, the high volatility of the cryptocurrency market creates short-term profit opportunities that are difficult to match in traditional stock markets. For example, recently, Hyperliquid (HYPE) experienced a 3.04% price fluctuation within 24 hours. Although such volatility also entails risks, for traditional investors seeking excess returns, it is undoubtedly highly attractive.

The rise of the DAT model provides a new pathway for traditional investors to access cryptocurrencies. The core operation of DAT involves holding digital assets through listed companies or funds, packaging them into traditional financial products, allowing traditional investors to participate indirectly—buying shares in listed companies is equivalent to buying cryptocurrencies.

This model lowers the technical barriers and perceived risks of direct crypto investment, serving as a “transitional bridge” for many traditional investors entering the crypto world.

03 Market Differences: Challenges and Learning Curve for Traditional Investors

The primary challenge for traditional investors entering the crypto market is adapting to the fundamental differences between the two markets. Stock markets typically have fixed trading hours and strict regulatory frameworks, whereas crypto markets operate 24/7, allowing continuous trading and price fluctuations.

Investment strategies need adjustment. While principles like diversification, technical analysis, and fundamental analysis apply to both markets, cryptocurrencies may require different indicators and more flexible risk management approaches.

Cryptocurrencies are generally viewed as more volatile, with prices capable of experiencing dramatic changes within short periods; daily fluctuations exceeding 10% are common.

Regulatory environments differ markedly. Stock markets benefit from strict regulation, enhancing transparency and accountability; in contrast, regulatory uncertainty in crypto markets can lead to higher volatility and speculative trading.

Differences in accounting treatment also pose challenges. In Hong Kong, cryptocurrencies like Bitcoin are usually classified as intangible assets, which differs from the approach of the US Financial Accounting Standards Board (FASB), which requires companies to record crypto assets at fair value.

04 Product Bridges: How Stablecoins and Synthetic Assets Attract Traditional Capital

The crypto world is building product bridges to attract traditional capital through financial innovation, with strategy-oriented stablecoins and synthetic assets serving as key hubs. These products aim to bring familiar yield structures from traditional finance into the crypto space, lowering the cognitive threshold for traditional investors.

Take Ethena’s USDe as an example; it functions like a fund share, generating returns through delta-neutral strategies involving long stETH and short perpetual contracts.

These stablecoins essentially bundle hedging strategies or low-risk yield products into circulating tokens with a $1 face value, structurally similar to certain traditional financial products.

The sources of yield for stablecoins have diversified, including on-chain lending, real-world assets (RWA), AMM market-making, and CeFi deposits. The annualized yields from each channel generally range between 3% and 8% under current market conditions.

This yield profile is naturally attractive to investors accustomed to traditional fixed-income products.

Stablecoins backed by real-world assets (RWA), such as USDY and OUSG, have relatively better compliance and have gained some regulatory recognition. These products, anchored to government bonds and other traditional assets, provide a low-risk entry point for conservative traditional investors into the crypto space.

05 Gate’s Bridge Role: Connecting TradFi and Crypto in Practice

Gate is actively building a bridge connecting traditional finance with the crypto world. In November 2024, Gate appointed Laura K. Inamedinova as Chief Ecosystem Officer (CGEO), who actively participates in Dubai’s global blockchain expos and the Global Family Office Investment Summit, hosting sessions like “DeFi Derivatives: Trends, Innovations, and Future Pathways.”

These actions demonstrate Gate’s vision of bridging the gap between traditional finance and blockchain innovation.

Gate Ventures focuses on innovative products like strategy-based synthetic stablecoins, analyzing the sustainability and risk characteristics of various yield mechanisms. This professional research provides traditional investors with a window into the complexities of crypto finance, reducing their learning curve.

On the platform, Gate offers a range of tools and services to lower the entry barriers for traditional investors. For example, Gate Live Mining provides real-time market analysis and trading education via live broadcasts, offering genuine profit opportunities for hosts and viewers.

This format combines education, community, and practical experience, aligning with traditional investors’ demand for professional content.

06 Future Trends: Accelerating Integration of Traditional and Crypto Finance

The acceptance of cryptocurrencies by listed companies continues to grow, and the DAT model is expected to see a new wave of development by 2026.

As the “four-year cycle” driven by Bitcoin halving is broken, the market is increasingly dominated by traditional financial capital and macroeconomic factors.

Bitcoin is no longer classified as an “alternative asset” but is increasingly viewed as akin to stocks and bonds. The US Commodity Futures Trading Commission (CFTC) has accepted Bitcoin as an asset and allows it to be used as collateral.

Product innovation will continue to deepen. Strategy-based stablecoins are evolving toward modular, regulation-friendly, and clearly yielding structures.

Projects with unique yield sources, good exit mechanisms, and liquidity moats (ecosystem adoption) will become the foundation of “on-chain money funds,” further attracting traditional capital inflows.

Gradual clarification of regulatory frameworks will pave the way for large-scale entry of traditional funds into the crypto market. Although markets like Hong Kong still face accounting challenges for crypto assets, the US and other markets have taken significant steps, providing a reference framework for the global industry.

Future Outlook

A CFO of a Hong Kong-listed company is reevaluating the company’s balance sheet, considering converting some cash reserves into Bitcoin. On his screen, the enterprise-level services of the Gate platform are displayed alongside traditional asset data on Bloomberg Terminal.

The conservative nature of traditional finance and the innovation of the crypto world are converging before his eyes, and the boundaries are becoming blurred. This seasoned finance veteran, with twenty years of experience, clearly understands that the company’s asset allocation landscape has forever changed—crypto assets are no longer optional but a necessary element of diversified portfolios.