Bitcoin and crypto seem to be on the verge of mainstream adoption, with US spot exchange-traded funds (ETFs) shattering inflow records, Goldman Sachs holding more crypto ETF shares issued by BlackRock than any other institution, and corporate treasuries from Strategy to Bitmine embracing digital assets.
However, a recent survey from Bank of America showed three-quarters of global fund managers remain steadfast in their refusal to touch digital assets.
According to Max Gokhman, deputy chief investment officer for Franklin Templeton Investment Solutions, the paradoxical numbers aren’t due to regulatory uncertainty or operational complexity, as those barriers have largely been addressed.
In an interview with CryptoSlate, Gokhman said the skewed numbers stem from fear, misconception, and the industry’s struggle with abandoning deeply held beliefs about what constitutes legitimate investment.
Gokhman spent years watching traditional finance grapple with the digital asset revolution. He noted:
“The biggest reason is it takes a while for an established industry to realize that they’re falling behind. There’s this fear of the unknown that exists.”
The stewardship paradox
Fund managers pride themselves on fiduciary responsibility, but this protective instinct has created a paradox: the desire to safeguard client assets prevents managers from accessing opportunities their clients increasingly demand.
According to Gokhman:
“Part of being a good steward is being aware of what your clients want. Clients from retail to institutional level are more interested in digital assets, but they’re finding that their investment managers are not actually there with solutions.”
The resistance stems from persistent misconceptions. One notion is that it’s all hyper-speculative and lacks value, while the other is that there is a lack of staff with the expertise to create legitimate investment solutions using digital assets.
The memecoin trap
When Gokhman encounters skeptical colleagues, the conversation follows a predictable script. Traditional finance stalwarts mention memecoins as representative of the entire crypto ecosystem, revealing what he called a surface-level understanding.
Just as equity markets span from blue-chip dividends to speculative biotechs, digital assets range from established protocols generating real revenue to purely speculative tokens.
His response has become automatic:
“Because you invest in equities, does that mean you’re only buying pink sheet penny stocks? High-yield debt has plenty of companies that most rational investors wouldn’t touch with a ten-foot pole. Most asset managers will tell you they own emerging market equities and distressed debt. That’s a key asset class for them.”
Gokhman stressed that the skepticism is selective. Managers are comfortable holding Venezuelan bonds, instruments that have defaulted multiple times, while balking at Bitcoin, which has never missed a payment in 15 years.
While fund managers debate crypto’s legitimacy, the market has quietly transformed. The data Gokhman cited punctures the retail narrative: 89% of Bitcoin transactions on exchanges exceed $100,000. He highlighted:
“That’s not retail money. The market is becoming more institutionalized.”
Educational challenge
Franklin Templeton’s response involves a three-tier campaign targeting central bankers, institutional intermediaries, and retail investors. The middle tier, which is crucial, consists of wirehouses and platform owners who control access to millions yet remain ignorant of client demand.
Gokhman questions these players about whether they asked their clients if they wanted crypto. He adds:
“They may have a Coinbase account where they have most of their wealth. You’re just not capturing that.”
Traditional advisors often discover wealth sits fragmented across platforms, with professionally managed portfolios containing none of the digital assets clients accumulate independently.
Franklin Templeton’s breakthrough lies in translation: expressing blockchain concepts in traditional finance language. When analyzing Solana, they don’t invoke revolutionary rhetoric but calculate discounted cash flows.
Gokhman explained:
“If you have something like Solana where actual fees are being paid on every transaction, we can project the growth of those transactions. Those are future cash flows. We can discount them back to the present.”
The approach demystifies digital assets by applying familiar analytical frameworks that any investor with basic valuation training can understand.
It all comes to yield
As Federal Reserve rate cuts approach, Gokhman sees opportunity. Traditional yield sources offer diminishing returns just as institutions face mounting pressure to generate income, and crypto can provide an alternative.
According to him:
“Everyone needs income. Staking is one clear way to do it. When people tell me about being worried about this [crypto] all being a scam, well, have you worried about the government just canceling all the debt? Because I’ve had that happen.”
Recent SEC guidance on liquid staking represents a potential inflection point. For the first time, regulated products can offer staking yields without requiring direct crypto ownership.
If crypto ETFs with staking enabled are approved, Gokhman predicts the resistance cannot persist indefinitely. He predicted:
“When we can give the yield, I think it’s going to drive even more adoption.”
The transformation will likely accelerate suddenly. Institutional adoption often follows the pattern of persisting skepticism until competitive pressure forces mass movement.
The great crypto divide persists between the 75% of fund managers clinging to familiar frameworks and a growing coalition recognizing that client service requires embracing technological change.
The question isn’t whether this divide will close, as economic pressure guarantees eventual adoption. The question is which managers will lead and which will scramble to catch up.
