According to Joseph Chalom, former head of Blackrock’s digital asset initiatives, and Sreeram Kannan, founder of Eigenlayer and CEO of Sharplink, investors have yet to fully appreciate the potential of Ethereum (ETH) to replace outdated settlement infrastructure on Wall Street. In a recent discussion on the Milk Road Podcast, Chalom highlighted the fundamental friction plaguing traditional finance, including day-long settlement periods, counterparty risks, and compulsory market participants, which create opportunities for intermediaries to extract rents.
Chalom explained that the current ecosystem is “quite inaccessible and full of friction where mediators take rents.” In contrast, Ethereum’s atomic settlement capabilities enable transactions to be processed in seconds without counterparty risk, positioning the blockchain as a universal settlement layer for finance and economic systems. This emerging infrastructure has the potential to transform the way financial transactions are conducted, making it more efficient and accessible.
Programmable Financial Transformation
The programmable nature of Ethereum enables portfolios to suspend dividend distribution in minutes instead of days and facilitates composable transactions in smart contracts, allowing for the creation of complex financial instruments. This functionality creates a “license to win” for institutions seeking to improve efficiency over current systems. As Chalom noted, Ethereum’s infrastructure enables every asset to be traded against another asset at any time, revolutionizing the way financial markets operate.
Kannan expanded on this vision, describing Ethereum as a “platform for verifiable trust” that solves counterparty risk through cryptographic proof rather than relying on institutional guarantees. This trustless architecture has far-reaching implications, enabling the creation of decentralized applications, including AI agent checks, predictive markets, and autonomous systems that can operate without human supervision.
Infrastructure Investment and Adoption
Both Chalom and Kannan emphasized the transition from education to adoption among institutional investors. While Bitcoin required explaining the concept of digital gold, Ethereum demands a deeper understanding of its infrastructure, which takes more time but generates greater conviction. The introduction of Ethereum ETFs in July 2024 marked a significant point of adoption, with treasury companies now accumulating approximately $14-15 billion in ETH investments.
Chalom predicted that the acceleration of Ethereum accumulation will surpass that of Bitcoin, as institutional actors recognize the productive assets and defi returns generated by the Ethereum ecosystem. As investors continue to appreciate the potential of Ethereum to replace outdated infrastructure, it is likely that the asset will become increasingly undervalued. For more information on Ethereum’s potential to replace Wall Street infrastructure, visit https://cryptoslate.com/ethereum-positioned-to-replace-wall-street-infrastructure-yet-remains-undervalued-by-investors/
