institutionalization

The cryptocurrency trading platform EDX Markets, supported by Charles Schwab, Citadel Securities, and Fidelity, has applied for a national trust bank license from the Office of the Comptroller of the Currency (OCC).This license will allow EDX to provide services such as digital asset custody, asset management, and trade settlement, but will not include traditional banking activities like accepting deposits or making loans. EDX stated that obtaining this license will help it better serve institutional clients and gain a competitive advantage in the wave of institutionalization in the cryptocurrency industry. Recently, several cryptocurrency companies, including Ripple, Circle, BitGo, Paxos, and Fidelity Digital Assets, have also applied for similar licenses, indicating that the industry is accelerating its alignment with the regulated financial system.

According to the latest cryptocurrency weekly report released by Gate Ventures, the market overall faced pressure and retracement in the past week, with BTC and ETH dropping by 6.8% and 5.8% respectively, and the Fear and Greed Index falling to 8, entering the "extreme fear" zone.Despite the weak price performance, the funding situation remains resilient, with BTC and ETH spot ETFs recording net inflows of approximately $767 million and $161 million respectively, indicating that institutional funds are still actively positioning. Overall, the total market capitalization of the cryptocurrency market has declined by about 5.5%, with the market in a phase of emotional recovery and structural differentiation.On the macro level, the Fed maintained interest rates, and the situation in the Middle East has driven up energy prices, increasing market concerns about stagflation risks. Meanwhile, the integration of traditional finance and the cryptocurrency market continues to deepen, with Morgan Stanley and Grayscale respectively advancing Bitcoin and Hyperliquid ETF-related layouts. Exchanges are also relaxing restrictions on related derivatives trading, further broadening institutional participation pathways. In addition, the trend of institutionalization in the prediction market sector is accelerating, with Kalshi completing over $1 billion in financing, reaching a valuation of $22 billion.In terms of investment and financing, a total of 11 transactions were completed last week, with a disclosed total financing amount of $1.18 billion, of which the infrastructure sector accounted for 64%, being the main flow of funds. Overall, against the backdrop of increased market volatility, funds continue to flow into core infrastructure and emerging narrative sectors, maintaining robust momentum for long-term industry development.

Bloomberg ETF analyst Eric Balchunas posted on social media, "Seeing some panic among Bitcoin holders (and the schadenfreude from bears) seems quite shortsighted to me. Since 2022, Bitcoin is up 429%, gold is up 177%, silver is up 350%, and QQQ is up 140%. In other words, Bitcoin's performance in 2023 and 2024 has left other assets far behind (but many seem to have forgotten this). Even if other assets later have 'the best year ever,' and Bitcoin is in a slump, they still haven't caught up to Bitcoin's performance. In my view, what is really happening is that the narrative of 'institutionalization' has been priced in by the market too early and too quickly, and this pricing was completed before it actually materialized. Therefore, Bitcoin needs a period of consolidation for reality to catch up with the previous price increases."

Suspected "1011 Insider Whale" Garrett Jin posted on the X platform, stating that comparing the current Bitcoin market to that of 2022 is highly unprofessional. He believes that there are essential differences between the two from the perspectives of long-term price structure, macro background, investor composition, and chip distribution. He pointed out that the current macro environment is completely opposite to the high inflation and interest rate hike cycle of 2022: the situation in Ukraine is easing, CPI and risk-free interest rates are declining, and especially the AI technology revolution is likely to drive the economy into a long-term deflationary cycle. Interest rates have entered a phase of reduction, and central bank liquidity is returning to the financial system, which defines the risk appetite behavior of capital.Since 2020, Bitcoin has shown a significant negative correlation with CPI, and under the AI-driven technological revolution, long-term deflation is a high-probability outcome. Technically, 2021-2022 was a weekly M-top structure, while 2025 is a breakout of the upward channel, which is more likely to be a "bear market trap" before a rebound. He noted that to replicate the bear market of 2022, it is necessary to simultaneously meet stringent conditions such as the re-emergence of inflation shocks, the central bank restarting interest rate hikes or quantitative tightening, and a decisive price drop below $80,850. It is too early to be bearish before these conditions are met.In terms of investor structure, 2020-2022 was a high-leverage speculative market dominated by retail investors, while since the launch of Bitcoin ETFs in 2023, structural long-term holders have entered the market, effectively locking in supply and significantly reducing trading speed and volatility. Bitcoin has shifted from a historical volatility range of 80-150% to a range of 30-60%, becoming a distinctly different asset. The current market has entered a more mature institutional era, characterized by stable underlying demand, locked supply, and institutional-level volatility.

According to CoinDesk, Ark Invest analyst and portfolio manager David Puell stated that the next phase of Bitcoin will no longer primarily depend on whether investors "believe" in the asset, but rather on how much exposure they are willing to allocate and through which investment tools they choose to participate.With the launch of the 2024 spot Bitcoin ETF and the rapid development of digital asset treasury strategies, Bitcoin has crossed an important threshold, entering a phase of institutional maturity. The combined holdings of ETFs and digital asset treasuries have reached about 12% of the total Bitcoin supply, far exceeding expectations, and have become one of the main drivers of price movements in 2025, a trend that may continue into 2026.As the amount of Bitcoin absorbed by ETFs and corporate treasuries exceeds expectations, the market is entering a more institutionalized phase with lower volatility. Ark Invest remains confident in its long-term valuation framework for Bitcoin. According to the valuation model published by Ark, its prediction for the price of Bitcoin in 2030 is "approximately $300,000 in a bear market scenario; approximately $710,000 in a baseline scenario; and approximately $1.5 million in a bull market scenario."David Puell indicated that driven by the "digital gold" narrative and institutional adoption, the company still expects Bitcoin to reach between $300,000 and $1.5 million by 2030. As volatility decreases and drawdowns narrow, Bitcoin may become increasingly attractive to investors with a lower risk appetite in the next cycle.

According to CoinDesk, investment bank Cantor Fitzgerald pointed out in its year-end report that Bitcoin may be entering a longer downtrend, potentially facing a "crypto winter" in 2026. Analyst Brett Knoblauch stated that Bitcoin is currently about 85 days away from its cyclical peak, and the price may remain under pressure in the coming months, even testing the average breakeven point of Strategy holdings at around $75,000.However, Cantor believes that this round of adjustment is different from previous bear markets triggered by large-scale liquidations or systemic risks. The dominant force in the current market is shifting from retail investors to institutions, and there is a noticeable divergence between token price performance and underlying developments, with decentralized finance, asset tokenization, and crypto infrastructure continuing to advance.

According to CoinDesk, Cantor Fitzgerald pointed out in its latest year-end report that Bitcoin may be entering a months-long downtrend, with the market potentially heading into the "crypto winter" of 2026 ahead of schedule.Analyst Brett Knoblauch believes that Bitcoin has retreated about 85 days from its recent peak, and the price may continue to face pressure, even testing Strategy's average cost line of around $75,000.However, unlike previous cycles, this downtrend is less likely to be accompanied by large-scale liquidations or systemic collapses. Cantor noted that the current market is dominated by institutions rather than retail investors, and the "divergence" between token prices and on-chain fundamentals is widening, particularly in the areas of DeFi, tokenized assets, and crypto infrastructure.On the regulatory front, the passage of the U.S. "Digital Asset Market Clear Act" is seen as a key turning point, expected to reduce policy uncertainty and encourage banks and asset management institutions to engage more deeply in the crypto market.Cantor concluded that while 2026 may not usher in a new bull market, the institutionalization of the crypto industry, compliance pathways, and on-chain infrastructure are gradually solidifying alongside the cooling of prices.

According to James, the head of ecosystem at the Ethereum Foundation, most stablecoin transaction counts on Ethereum come from P2P (accounting for 67%), but the transaction volume only accounts for 24%. Data from the past 12 months shows that B2B transaction volume surged by 156%, with the average transaction size increasing by 45%, while P2B transactions grew the fastest at 167%, becoming the category with the highest growth rate.The report indicates that institutions are not increasing the frequency of payments, but rather the amount per transaction is continuously expanding, reflecting the growing maturity of stablecoin applications in large commercial settlements. Consumer payments to businesses are the fastest-growing category for Ethereum stablecoin payments.

ChainCatcher news, according to CoinDesk, Benchmark analyst Mark Palmer pointed out that the passage of the U.S. CLARITY Act will establish a clear regulatory framework for the digital asset market, distinguishing between the commodity or security attributes of cryptocurrencies. This act is expected to address the legal uncertainties that traditional financial institutions have long faced, accelerating the entry of institutional investors such as asset management companies and hedge funds.The report indicates that compliant platforms like Galaxy Digital and Coinbase will hold a competitive advantage in this round of institutionalization. Currently, while the SEC maintains a constructive attitude, the lack of codified regulations still exposes the industry to the risk of policy fluctuations.

ChainCatcher news reports that DWF Labs Executive Partner Andrei Grachev stated at the Consensus Hong Kong 2025 conference that the cryptocurrency market has shifted from a speculative market to one dominated by institutional-grade financial products.Currently, crypto investment is developing towards low-risk, stable returns. Bitcoin has evolved from an experimental asset used for buying pizza in its early days to an institutional-grade asset, now included on the balance sheets of governments and corporations. Grachev mentioned that DWF Labs' future investments will focus on five dimensions:AI agents and crypto integration, with the company establishing an AI Agent fund to invest in mid-term AI-driven crypto projects;DeFi research and development, as DeFi innovation continues despite the weakening Layer 1/2 narrative;Yield-bearing assets and stablecoins to meet low-risk investment demands;Tokenization of real-world assets (RWA), working with banks and regulatory bodies to advance the tokenization of assets like stocks and real estate;The meme token market, which, despite a high failure rate, remains an important liquidity hub.

ChainCatcher news, according to Tokenpost, the chairman of the Korea Financial Investment Association, Seo Yoo-sik, stated at the New Year meeting held in Yeouido, Seoul, that he will actively support the institutionalization of domestic token securities and the approval of virtual asset ETFs.Chairman Seo pointed out that, given that Bitcoin and Ethereum spot ETFs have already been listed and traded in the United States, Hong Kong, Canada, and other regions, South Korea should at least list Bitcoin or Ethereum ETFs and cultivate them into financial products. He emphasized that he will continue to propose to the financial authorities to allow virtual asset ETFs to ensure that South Korea does not fall behind in this trend.

ChainCatcher news, according to cryptonews, European Crypto Initiative (EUCI) co-founder Marina Markezic stated that MiCA could accelerate the institutionalization and integration of the EU crypto market, driving mergers and acquisitions between traditional finance and crypto-native enterprises, while potentially leading to the exit of some companies or products from the market.Although MiCA largely excludes DeFi from direct regulation, its interfaces or service access points may face additional regulation from member states, and this uncertainty could lead to friction.