Disclaimer: speaking only of Bitcoin, the utility of the larger crypto space is somewhat questionable.
Yes, there will always be a need for trust, and Bitcoin doesn't change that. What it does is actually facilitate more, rather than less, trust.
By having a rock-solid form of money with a well-known, immutable monetary policy and issuance rate, that doesn't rely on any single entity and is very difficult to corrupt, all kinds of trust-related issues (moral hazard, Cantillon effect, theft of purchasing power) are resolved.
In addition, commerce and exchange between strangers can more easily be facilitated based on such a system rather than one that relies on multiple intermediaries.
If I can have cryptographic proof of escrow in a multi-sig wallet (2 of 3, where there is a trusted (!) 3rd party), I might be willing to do a transaction with someone I might otherwise not (e.g. due to a lack of trust that they have the funds available).
Spot on. I think part of the problem is in the common framing of cryptocurrencies as trustless. At the end of the day there is trust in every human made system, blockchain or not. With Bitcoin, you're still trusting that all of the developers, miners, and users won't decided to increase the block reward at any point in the future.
So what's the point of Bitcoin (and other cryptos) from a risk management perspective if it's not actually trustless. It gives you exposure to a significantly different risk profile, and one that can be better reasoned about. You're no longer at the whim of governments and corporations, but instead a loosely "organized" set of developers, miners, and users. And we can reason about what those actors will do, based on human psychology and the fact that people tend to act in their financial best interest. And Bitcoin is setup in such a way that the system operates correctly when the participants behave this way.
Yes, there will always be a need for trust, and Bitcoin doesn't change that. What it does is actually facilitate more, rather than less, trust.
By having a rock-solid form of money with a well-known, immutable monetary policy and issuance rate, that doesn't rely on any single entity and is very difficult to corrupt, all kinds of trust-related issues (moral hazard, Cantillon effect, theft of purchasing power) are resolved.
In addition, commerce and exchange between strangers can more easily be facilitated based on such a system rather than one that relies on multiple intermediaries.
If I can have cryptographic proof of escrow in a multi-sig wallet (2 of 3, where there is a trusted (!) 3rd party), I might be willing to do a transaction with someone I might otherwise not (e.g. due to a lack of trust that they have the funds available).