Traditional financial institutions will drive the next phase of growth in the digital asset marketplace, delegates to the Bermuda Tech Summit heard on Monday.

The present bear market, driven by a range of factors, has seen Bitcoin fall from its high of about $65,000 in November 2021 to just $16,000 a year later, before recovering some of that decline.

It is at present trading at about $27,500.

“Even before the scandals, culminating in FTX of last year, the story of the bear market has been the resilience of the institutional interest,” said Oliver Linch, chief executive of Bittrex Global, which operates digital asset trading platforms in Bermuda and Lichtenstein.

“We’ve heard this for years — the institutions are coming, the institutions are coming — but I think what we are saying and when I speak to our customers and our colleagues around the world is ‘sure, they might have taken their foot off the gas a little bit, but they’re still very much in the driving seat’. They’re still interested in it.

“Every major bank, every financial institution, has a substantive crypto desk now. Even the ones that say they don’t. They do.

“Every fund manager knows that they have to be making this available to their customers, because otherwise they’ll be seen as stuck in the mud, or past it, and that’s kind of a death sentence.”

He added: “What we see at Bittrex Global is this is really precipitating a maturing of the market, away from the bright lights and buzz promises towards a situation where actually crypto will just be seen as part of the wider financial sector.”

Looking forward, he wondered if the Tech Summit itself might be affected by that evolution.

“In five, ten years from now, does this conference look the same as it does now or are the people on the stage going to be [JP Morgan] and Goldman [Sachs] bankers and crypto people participating as equals rather than in separate conferences?

“I think that’s the future that we’re looking to build now, and it may well be that this bear market, painful though it has been for many, is what’s needed to facilitate and precipitate that.”

Mr Linch was appearing on the panel Pioneering Digital Assets — A Gateway to the Future in a packed ballroom at the Hamilton Princess Hotel & Beach Club.

The panel also featured Jeff Baron, chief compliance officer, Bermuda office of Coinbase ; Philippe Bekhazi, founder and CEO, Bermuda-based XBTO; and Kristopher Klaich, deputy director of policy, US-based Chamber of Digital Commerce.

The panel was moderated by Natalie Neto, a partner in the Bermuda office of Walkers.

Mr Klaich said: “The institutional development and interest is growing in leaps and bounds, and that is impressive, that’s exciting, and it’s going to be a different bull market.”

He added: “You are seeing these huge companies — old, old companies in traditional finance — that are getting involved, setting the groundwork.

“When prices tick back up and the average person becomes more comfortable because their bank is involved — and these trustworthy, or at least traditionally trustworthy, institutions are involved — it’s off to the races.

“I think that’s where things are going to really take off.”