Cryptocurrencies and blockchain technology were invented in the tech world as a way to reinvent finance without banks or intermediaries. This is a controversial idea to say the least, and not everyone in traditional finance sees inherent value in the concept. However, the meteoric growth in cryptocurrency values due to mass speculation has created an opportunity to leverage crypto markets in very conventional financial means.
One good example is arbitrage. Cryptocurrencies, because they were built ex nihlio without extant financial infrastructure, are very inefficient, non-fungible, and illiquid. Thus transferring cryptos from one exchange to another is very hard, meaning the prices for a cryptocurrency on one platform can be more expensive than another. Financial intermediaries have begun arbitraging this difference by establishing automatic vectors by which crypto trades on one exchange are transferred to another through a private fund; this may lower the gap in prices between exchanges over time, but the relatively small amount of financial professionals in this area and the inherent risks of the act (which makes it technically not pure arbitrage, but pretty close) mean there is still money to be made here.
Then there is the reintroduction of leverage, third-party verification, and credit–all concepts that are very grounded in conventional financial theory and require a financial grasp of numbers and risk modeling. These aspects of a financial infrastructure have begun to be released for crypto traders over the last couple of years, but the lack of legitimacy in much of the cryptocurrency world has limited who gets involved and how much money there is to be made.
There is nonetheless an opportunity for opportunistic financial professionals to apply their skills in the crypto world, as a lot of the established and conventional products of finance are not familiar to most of the crypto speculators, and we may see companies such as Coinbase (COIN) continue to carve out more and more conventional financial products for cryptocurrency markets.
At the same time, growing awareness of the ecological, technological, and security risks behind cryptocurrency might result in a slow burn of disinterest among former crypto enthusiasts, or harsher regulation may render much of cryptocurrency a fad of the past. Until then, however, the conventional tools of finance may have a place in profiting off of the wild west of cryptocurrencies.