The Convergence is Here: Digital Assets Become the Infrastructure

The Convergence is Here—and It's Happening Faster Than Anyone Expected

While traditional finance spent decades building walls between asset classes, crypto is demolishing them in real-time, creating investment opportunities that didn't exist six months ago—and risks that most institutional playbooks haven't even considered yet.

This week's intelligence reveals a market in the throes of structural transformation: stablecoins are quietly becoming the plumbing for a $2.5 trillion payments revolution, Bitcoin is graduating from boardroom curiosity to balance-sheet necessity, and prediction markets are rewriting the rules of speculation itself.

From Circle's billion-dollar bet on programmable money to China's 25-fold gold accumulation strategy, the signals are unmistakable—we're witnessing the birth of a genuinely multipolar financial order where digital assets aren't just participants, but increasingly the infrastructure itself.

Yet beneath the headline-grabbing $3.67 trillion market cap lies a more nuanced story of growing pains and strategic pivots that will determine whether this bull run ends in sustainable adoption or another spectacular unraveling. As institutional capital searches for yield in a world of rate cuts and regulatory clarity finally emerges from the post-FTX fog, the question isn't whether crypto will reshape global finance—it's who will control the levers when it does.

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Stablecoins and tokenized assets are reengineering the DNA of global capital markets—turning once-futuristic promises into today’s investable realities.

The utility of stablecoins is migrating from crypto’s periphery to its core. Tony McLaughlin at Ubyx frames these dollar-pegged tokens as “old-fashioned negotiable instruments wearing new clothes”—a view suggesting regulatory integration, not opposition, will determine their fate. With $17–18 billion in annual volumes and a potential grab at the $2.5 trillion payments market, the opportunity is not lost on institutions scanning for compliant blockchain rails.

Yet the story of DeFi is not without its growing pains. Following the spectacular undoing of FTX, Wildcat Labs’ Laurence Day insists, “DeFi has grown up… DeFi’s voice finally broke.” Wildcat’s portfolio—already over $100 million in undercollateralized on-chain loans—underscores a new phase: risk rigor and governance, not unchecked code, will drive scale. This direction marks a departure from the VC-fueled excess of earlier cycles.

Circle’s $CRCL ( ▲ 1.36% ) Gordon Liao positions stablecoins as the connective tissue between banking and blockchain, citing ongoing integration into payment systems and the launch of ARC, Circle’s bespoke layer-one. Stablecoins like Ethena’s USD, which notched 174.8% growth to $14.8 billion in market cap, are punching through volatility by wielding real-world asset strategies and institutional-grade reserve models.

These moves aren’t just technical evolutions—they’re fast becoming the substrate for a more liquid, programmable, and globally interconnected financial system. Traditional and digital rails are converging, and investors would do well to update their maps.

Macro trends are no longer just a backdrop—they’re emerging as the engine room of crypto capital flows.

With the total digital asset capitalization touching $3.67 trillion amid bullish macro signals, the conversation among strategists is shifting decisively. Martin Toman, market strategist at Milk Road, projects: "Those are the costs of that huge upside opportunity that we are all chasing here. So it's part of the game. Just, you know, chill out and, like, do not panic." His counsel—structural patience over tactical haste—echoes a new, more measured attitude as investors eye the $10 trillion mark.

Institutional capital is poised for reallocation. As interest rates peak and money market funds, now housing $7 trillion, seek fresh returns, Mel Mattison points to the “expected capital flows from traditional assets like gold to Bitcoin,” catalyzed by a stabilizing U.S. dollar and sustained institutional uptake. This unsentimental rotation is also mirrored by Adam, who notes Bitcoin’s $BTC.X ( ▼ 0.6% ) unusual resilience: "Never in its history has it traded at this kind of elevated level relative to new all time high for this amount of time." In other words, volatility may still provoke headlines, but the base case is structurally buoyant.

Not all analysts, however, share maximalist optimism. Some cite geopolitics—US-China trade dynamics—as potential volatility triggers and stress test for crypto’s emerging status as an uncorrelated asset.

For the crypto-native capital allocator, the message is clear: macro narratives no longer just inform sentiment—they are the substrate on which the next phase of digital value creation is being engineered.

Once a Silicon Valley curiosity, Bitcoin is being written into the investment playbooks of global institutions at an accelerating clip.

Major banks are already prepping for the next phase. JPMorgan, among others, is expected to recognize Bitcoin and Ethereum $ETH.X ( ▼ 0.79% ) as collateral for institutional financing by 2025—a marker of confidence that shifts market gravity. “When your cost of capital is 10% and your cash yields zero, your real yield is negative 10%,” notes Michael Saylor, whose conviction has become a bellwether for the asset class.

Macro forces are sharpening the narrative: 82% of central banks have shifted to rate cuts, turbocharging liquidity and asset searches. In 2023, the M2 money supply ballooned by $14 trillion, catching the attention of allocators seeking scarcity amid a sea of excess. Allocators are now benchmarking Bitcoin against traditional safe havens, with the next bull case pointing toward $150,000 by January, contingent on the pace of institutional flows and macro dislocation.

Yet, divergences remain. While figures such as Peter Dunworth champion Bitcoin as “the first time we can divorce Wall Street speculation from Main Street consequences” via over-collateralization, others caution that regulatory ambiguity and systemic complexity could temper the speed of adoption. Morgan Krupetsky of Ava Labs underscores that integration will depend as much on regulatory clarity as on blockchain innovation.

The coming quarters will reveal whether Bitcoin graduates from alternative asset to balance-sheet mainstay—or if institutional embrace proves cyclical, not structural

As superpowers recalibrate their strategies, digital assets are fast becoming both a bargaining chip and a backstop in the contest for global financial influence.

In the last year, the choreography between Washington and Beijing has taken on fresh significance for crypto investors. China’s official gold holdings have multiplied 25-fold in 2025, and the yuan now accounts for 53% of China’s cross-border trade—up from 0% in 2010. Dante Coke, host of Bitcoin Simply, cut to the heart: “China has been playing chess while we’ve been stuck playing monopoly.” The implication is clear—crypto, and Bitcoin in particular, may become the chosen instrument for trustless settlement, especially as nation-states navigate resource dependencies and shifting alliances.

Meanwhile, the United States is quietly positioning itself to claim the mantle of ‘crypto capital,’ hedging its dollar supremacy with digital assets—and, as Coinbase $COIN ( ▼ 1.96% ) CLO Paul Grewal notes, working through a legal maze he describes as “absolutely on the side” of prediction markets. The optimism is tempered, however, by what CFTC Chair Michael Selig frames as the “great transition to a multipolar world, a post-American order.” With global debt ballooning to $338 trillion and central banks predicted to cut rates 312 times in 2025, the undercurrents are unmistakable: capital is searching for new refuges.

Some view this transition as an opening for blockchain’s more resilient financial rails; others warn of regulatory missteps and lingering opacity. Yet the market signal is unmissable—crypto is becoming a feature, not a bug, of global financial power.

For investors, the question is not just regulatory risk, but who shapes the next order—and how decisively crypto assets are woven into the fabric of international finance.

The centre of gravity in Web3 is shifting—where tokens, protocols, and user communities are redrawing the map for capital and culture alike.

Raucous capital raises underscore the momentum: MetaDAO’s $META.X ( ▼ 5.55% ) recent $143 million raise—achieved in a mere three days—signals a swelling appetite for decentralized Launchpads, while also reflecting investors’ readiness to back Web3’s evolving infrastructure. Jake Koch Gallup, a research analyst tracking this pulse, believes “everyone should lean into more legit tokenomic projects, with actual roadmaps,” underscoring a market newly allergic to empty products and ready for serious delivery.

Traditional fault lines around tokenomics are resurfacing amidst this optimism. Ryan AJC’s critique—namely, whether chain-level tokens like MegaETH can sustainably capture value, or if dApp-specific tokens will outpace them—gets to the heart of a structural dilemma: as Web3 matures, the capital stack faces a fork between infrastructure providers and the applications that capture genuine demand. “Mega ETH can probably justify a pretty high capture on the revenues,” Ryan notes, but the real contest may be on which layer the economic moat settles.

Meanwhile, a quiet recalibration of roles is underway for traditional finance. Gordon Liao of Circle points to stablecoins as the Trojan horse for mainstream integration. His bet is on a “plethora of stablecoins" standardizing access, not just for digital natives but for regional banks and legacy institutions—presaging a future where fiat rails and tokenized assets coexist, and where liquidity may flow accordingly.

As Web3’s operating system expands, user engagement isn’t just a community metric—it’s the proving ground for new forms of ownership, participation, and yield. For investors, the signal is clear: the next frontier isn’t just decentralization, but the disciplined curation of incentives and trust.

Disclaimer: The information provided in this newsletter is for informational purposes only and should not be considered investment advice. Cryptocurrency investments are speculative and involve significant risk. Please conduct your own research and consult with a financial professional before making any investment decisions.