Sam Bankman-Fried says a tidal wave of institutions could jump into crypto in 2022, if they get clear regulatory guidance

• FTX CEO Sam Bankman-Fried said institutional adoption of cryptocurrencies could accelerate in 2022.
• The pace of adoption depends on the level of regulatory clarity in the US and globally, he told Bloomberg Monday.
• A lot of the level of activity in the crypto industry in 2021 was "preparatory," the billionaire said.

Cryptocurrencies can expect to see more institutional adoption in 2022 — but whether it's a tidal wave or a trickle will depend on what happens on the regulatory front, according to FTX boss Sam Bankman-Fried.

The crypto exchange CEO predicted that regulatory clarity will open the door for some large investment banks and pension funds to enter the industry this year.

But he said developments in digital asset regulation will dictate the pace of adoption by financial institutions.

"Especially if we feel like they're getting clarity, that could come in a tidal wave, it could come in a trickle," he said in an interview released Monday.

Still, he doesn't expect a rapid inflow within the next six months at least as it takes time for institutions to onboard new platforms and assets.

"It's going to be a long process probably stretched out over a few years," he said, adding that the size of the market could be "really enormous."

"I've talked to every large bank, every large investment bank, pension funds — they're all eyeing the sector. Many of them have started breaking ground on their activities in it, but it's just slow and it takes time."

A growing number of financial institutions, including BlackRock, Mastercard, and Visa, have already introduced crypto-related offerings. Some financial advisors have recommended digital assets should be part of a portfolio, no matter what your age.

Bankman-Fried, who launched crypto exchange FTX in 2019, pointed to activity in the crypto industry last year, saying that was just the foundation for what is to come.

"I do think that there's going to be a lot happening this year," he said. "We've already seen what happened last year. But a lot of that has been preparatory."

In 2021, cryptocurrencies such as bitcoin and ether gained in value, as some investors looked for a hedge against the high inflation seen around the world. Rising mainstream interest drove soaring retail demand across the market, with data showing global crypto adoption rose by more than 880% in the year.

But cryptocurrencies overall have fallen back in recent weeks. Asked whether he sees bitcoin staging a comeback in 2022, Bankman-Fried was somewhat upbeat.

"The things that make me optimistic basically are more regulatory clarity in the US and globally, which I think could help a ton, and institutional adoption," he said. "I think those are also related to each other."

The crypto billionaire also gave his take on when developments in a regulatory framework for digital assets can be expected.

"I think that you're probably going to see the first batch of it coming out in 2022," he said, adding that the stablecoin sector in particular could get some ground rules.

Bankman-Fried also touched on the metaverse — a futuristic virtual landscape in which people can interact, buy non-fungible tokens, or even date — which has attracted high interest from Wall Street institutions. He said the metaverse could take time to materialize and become a full-blown technology.

"I expect that we might see a cooling off at least relatively speaking of some of the pure NFT activity that we've seen recently — unless and until we see large names of players and partners come into the space," he said. "But I do expect that to happen, and that will be supercharging the next piece of Web3 growth."

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