#114 Untangling: Bitcoin's Institutional Rise

In this episode, we dive deep into the evolving relationship between Bitcoin, blockchain, and financial institutions. Once a symbol of rebellion against the banking system, Bitcoin is now embraced by institutions and governments alike—raising big questions.

Are they legitimizing crypto or diluting its original purpose?

As BlackRock, PayPal, and governments tokenize assets, we explore whether this new wave of adoption is saving Web3 or reshaping it altogether.

Key highlights:

• The Institutional Era of Bitcoin and Crypto Finance: there has been a massive influx of institutions into the Bitcoin space. With over 10% of Bitcoin’s total supply now held by institutions, ETFs, and governments, and public companies like MicroStrategy owning over half a million BTC, the duo reflects on how this shift has transformed Bitcoin from a peer-to-peer payment network into a mainstream financial asset. The approval of ETFs, growing regulatory clarity, and widespread adoption by traditional financial firms all underscore this new financial paradigm.
• Benefits and Trade-Offs of Institutional Involvement: Institutional adoption brings with it pros like regulatory clarity, increased financial stability, and global legitimacy. It’s driving up prices, enabling better user protections, and opening new enterprise use cases beyond just finance—like digital identity and supply chain management. However, it also raises concerns about centralization, custodial dominance, and potential protocol-level influence.
• Cultural Shifts and the Future of Innovation: Many innovators have either exited the space or moved on to more flexible ecosystems like Ethereum. While Bitcoin thrives as “digital gold,” innovation now happens largely outside the BTC base layer. So does Web3's real future lies in alternative chains and what does rise of custodians like Coinbase and PayPal means for user control and digital self-sovereignty?

The institutionalization of Bitcoin is undeniably reshaping the crypto landscape. What began as a decentralized experiment is now a critical part of the financial system.

While some of the original dreams of Web3 may be fading, this mainstream adoption could be the key to realizing its broader potential—from stable payment rails to real-world blockchain use cases.

Whether you're a purist or pragmatist, one thing is clear: the future of Bitcoin and blockchain will be built by institutions, innovators, and communities—together.

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This episode is sponsored by the VeChain foundation. Learn more about VeBetterDAO here:

https://vebetterdao.org/

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Learn more about Web3 at:

https://untanglingweb3.com/

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Untangling Web3 is brought to you by hosts Jack Davies and Alec Burns, with music by Daniel Paigge. Got a question or topic suggestion? Send us an email at [email protected].

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The views we express here are our own, and do not represent the views of our employers. Nothing discussed or stated in the show should be considered advice.