Everything you need to know about TradFi ๐งต
Before the advent of crypto (pre-2009), the financial market was fully TradFi (Traditional Finance), slower, and controlled by institutions.
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๐ฆ 1. Centralized Gatekeepers
All financial activity was controlled by banks, brokers, and governments.
You needed a broker to buy stocks.
Bank transfers could take days.
Access to Forex or commodities required special accounts.
Only institutions or accredited investors could trade complex products like derivatives.
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No 24/7 markets. No self-custody. No DeFi.
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โณ 2. Limited Accessibility
Markets were closed on weekends.
Stocks: Open 9:30 AM โ 4 PM (NYSE, NASDAQ)
Global investors faced barriers: high fees, KYC, currency restrictions
You couldnโt easily trade international assets unless you had special accounts.
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๐ผ 3. Heavily Regulated
Every market was regulated by government agencies:
SEC (U.S. Securities and Exchange Commission)
CFTC (Commodities Futures Trading Commission)
FCA (UK)
FINRA, Basel accords, etc.
Regulation added protection but also friction and exclusion.
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๐ฐ 4. Institutional Dominance
Hedge funds, investment banks, and asset managers ran the game.
Retail investors had limited influence and worse tools/data.
Market-making and liquidity were largely handled by big Wall Street firms.
Front-running, insider access, and lobbying were common.
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๐ 5. Traditional Asset Classes
The main things people traded were:
AssetDescription
StocksOwnership in companies
BondsLoans to governments or companies
ForexCurrency pairs traded globally
CommoditiesPhysical goods like oil, gold, wheat
Real EstateProperty, REITs
IndicesBaskets of stocks (S&P 500, Dow, FTSE)
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๐น๏ธ 6. Old School Technology
Trade execution took minutes or hours
Paper-based processes still common in some countries
Wire transfers could take days
No real-time settlement: T 2 or T 3 (trade date 2/3 days)
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๐ 7. Custody & Trust
You never really โheldโ your assets brokers and banks did.
You trusted centralized entities to:
Protect your assets
Execute trades
Keep accurate records
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๐ 8. Slow Innovation
New products (ETFs, derivatives) took years to develop and approve.
User experience wasnโt a priorityโWall Street catered to institutions.
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โ๏ธ Summary: Pre-Crypto Financial Markets
CategoryDescription
AccessGatekept, slow, limited
SpeedSlow (T 2 settlements, slow wires)
ControlCentralized institutions
CustodyYou didnโt hold your assets
InnovationSlow-moving and top-down
Market HoursMostly weekdays only
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When crypto came along 24/7 trading, permissionless access, self-custody, and programmable finance
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