Unit 2 · Level 5 · RWAs & tokenization
TradFi meets DeFi
In January 2024, US spot Bitcoin ETFs launched and gathered tens of billions within a year. BlackRock tokenized a fund; major banks piloted settlement on-chain; the EU's MiCA rules gave issuers a rulebook. Institutions bring liquidity, custody standards, and legitimacy. What they don't bring: any change to volatility, to scams, or to your personal responsibility for your keys.
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What you get asked
What genuinely changes when institutions like asset managers and banks enter crypto?
Institutions widen the pipes, so more money can flow in AND out. Bitcoin still dropped hard in past cycles with institutions watching; size doesn't repeal volatility.
A friend says: 'BlackRock is in crypto now, so number can only go up.' What's the flaw?
Institutions sell as readily as they buy. ETF flows go both directions, and 2008 proved institutions can be at the centre of a collapse. Adoption is a plumbing story, not a price guarantee.
The EU's crypto framework that came into force across 2024, giving stablecoin and token issuers a rulebook, is called ___.
Markets in Crypto-Assets. Details vary and keep evolving; the takeaway is that European issuers now operate under real licensing rules, which mainly helps the custody-and-issuer questions from last lesson.
Institutions in crypto: match what changed to what didn't
Sort every 'institutions are here' headline into these two buckets and the hype largely files itself.
How does DeFi actually change when RWAs and institutions plug in?
RWA collateral gave protocols like MakerDAO real bond income, but with whitelists, KYC, and legal wrappers attached. Realer yield, less permissionless: that's the trade. 🐜
The rest of this unit
Treasuries, buildings, and funds on-chain, and the awkward question of who holds the real thing.