Caitlin Long, CEO of Custodia Bank, cautioned that traditional finance (TradFi) firms may struggle in the next bear market due to outdated risk tolerance models that are ill-equipped for volatile crypto markets. Speaking at the Wyoming Blockchain Symposium, Long highlighted the discrepancies between legacy financial systems and the real-time settlement of blockchain protocols. She noted that while TradFi institutions traditionally utilize fail-safes, such as discount windows, these protections may not be available in the crypto environment. As such, Long expressed concern about potential liquidity crises that could arise in a bear market. Institutional participation has been a driving force in the current market cycle, yet overleveraging by inexperienced firms could lead to significant sell-offs, exacerbating market downturns. Chris Perkins, president of investment firm CoinFund, echoed Long's concerns, stating that the lack of synchronization between the two ecosystems could culminate in profound financial repercussions. The comments underline the fragility of the intersecting worlds of traditional finance and cryptocurrency, especially as new market challenges loom.

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