Thematics Unlocked: Signs of a maturing ETF market - Page 19

opportunity to capture greater share of that CAPEX .
Asset managers seek to profit from buying , selling , and lending digital assets , or holding a portfolio of businesses engaged in the digital asset ecosystem . By leveraging application programming interface ( API ) models , these digitallyenabled banks are arbitraging global prices around the clock , creating more efficient markets , financing underserved segments and attracting young investors who have historically eluded legacy institutions . Even if the crypto market were to remain flat , digital asset management revenues could grow by ~ 24x , simply by shifting individual-dominated ownership mix towards institutions , in line with US equity markets .
Energy and resource management providers aim to optimise the energy and power required for digital asset mining . Providers aim to support miners as they digitise distributed energy resources and facilitate the development of solar alternatives and storage . Improved microgrid management and the digitisation of electricity networks could offer an estimated ~$ 80bn per year in energy savings , freeing capital for investments in new electricity infrastructure .
Payment platforms aim to streamline payment processes and reduce fees by removing intermediaries and directly authorising and settling digital asset-to-digital asset or digital asset-to-fiat transactions . Fees for mid-sized merchants often reach
Chapter 3 : Themes in focus
~ 2.50 % of the total transaction amount , which is distributed between several intermediaries .
In 2021 , on-chain payment volumes reached ~$ 25trn across stablecoins , bitcoin and ethereum – with a blended-fee take rate of 0.04 %. The global payment market stands at ~$ 260trn per year . By maintaining direct consumer and merchant relationships , payment platforms have the opportunity to shift the competitive dynamics in their favour , away from legacy institutions .
Blockchain technology providers enable blockchain-based applications , and offer systems , solutions , or software that support the wider ecosystem . For instance , Block – formerly Square – is developing software for the bitcoin network . In North America alone , banks spend $ 115 billion a year on IT , the majority of which goes towards outdated systems . As adoption of updated digital infrastructure continues , these new technology investments are building a competitive advantage over traditional institutions bogged down by their legacy systems .
The confluence of finance , technology , and digital assets are creating new and exciting opportunities for investors to explore . The digital economy is still nascent , but the companies that are operating in this space could have the potential to define the future of finance .