As the regulatory fog lifts over the digital asset landscape, a new era of clarity emerges—one with both opportunity and sharper edges.

Today, we're diving deep into the White House's 168-page crypto blueprint that's reshaping America's approach from adversarial to pragmatic, while Europe doubles down on digital IDs and CBDCs.

Meanwhile, Wall Street's not just watching anymore—they're deploying capital at unprecedented scale, with Bitcoin-backed loans reaching $9 billion and institutional players choosing Ethereum as their on-chain playground. "The transition from monetary dominance to fiscal dominance is accelerating," warns Felix of Forward Guidance, "and many haven't wrapped their heads around this new regime."

Whether you're positioning for the next institutional wave or navigating the evolving compliance landscape, this issue unpacks the forces redefining our market's future...

As always, feel free to send us feedback at [email protected].

The summer of 2025 marks a turning point: crypto’s regulatory fog is lifting, but the new clarity comes with sharper edges.

A 168-page White House policy blueprint—President Trump’s Working Group on Digital Asset Markets—has set the tone for a more assertive US stance. The SEC’s “Project Crypto” aims to modernize securities rules for on-chain assets, while the CFTC is poised to oversee spot markets for non-securities. The roadmap’s call for self-custody rights and IRS reporting reforms signals a shift from adversarial posturing to pragmatic engagement. “Wall Street is converging onto crypto, and they're choosing to do a lot of this work on Ethereum because stablecoins have completely changed Wall Street's mind about how useful crypto can be,” says Tom Lee of Fundstrat and Bitmine, who sees this as crypto’s “ChatGPT moment.”

Europe, meanwhile, is doubling down on digital IDs and CBDCs, stoking debate over privacy and surveillance. The Tornado Cash saga has become a legal crucible: the Fifth Circuit’s reversal of OFAC sanctions on smart contracts is a win for code, but criminal charges against developers persist. Hasseb of Dragonfly warns, “A criminal case is not the place to adjudicate a policy question… Go pass a law and make it clear.”

Stablecoins are the new battleground for dollar dominance. US regulators are eyeing full-reserve requirements and audits, seeking to avoid the chaos of 19th-century free banking. With $9 billion in Bitcoin-backed loans and 4.9% yields on EURC via Aave, the institutionalization of crypto is accelerating. Felix of Forward Guidance notes, “The transition from monetary dominance to fiscal dominance is accelerating, and a lot of people have not wrapped their heads around this new regime.”

Regulatory maturation is catalyzing institutional flows, but the balance between innovation, privacy, and compliance remains precarious. The next phase of crypto will be defined not just by code, but by the rules that govern it.

Bitcoin $BTC.X ( ▼ 0.61% ) and Ethereum $ETH.X ( ▼ 2.59% ) are no longer just crypto’s crown jewels—they’re becoming the bedrock of global digital finance.

Bitcoin’s transformation is unmistakable. With 97% of transactions now institutional net buying, the asset has shed its speculative skin, behaving more like a blue-chip S&P 500 stock than a volatile tech bet. The success of spot ETFs and a wave of corporate treasury adoption have propelled BTC to new all-time highs, while volatility has quietly receded. “Wall Street is converging onto crypto, and they’re choosing to do a lot of this work on Ethereum,” notes Tom Lee, Fundstrat’s CIO and a perennial market bull.

Ethereum, meanwhile, is enjoying what analysts call its “ChatGPT moment.” The viral adoption of stablecoins and the rise of ETH treasury companies—BitMine’s $BMNR ( ▼ 5.09% ) $500M allocation being the latest headline—have catalyzed a decisive shift. Since April, altcoins are down 44% against ETH, and the ETH/BTC ratio has bottomed, signaling a new phase of outperformance. “Ethereum’s giving better risk-adjusted returns than altcoins,” says Ben Cowen, pointing to imminent price targets of $4,000–$15,000 if current trends hold.

Major protocols like Solana $SOL.X ( ▼ 1.59% ) and Hyperliquid $HYPE.X ( ▼ 4.74% ) are innovating on speed and compliance, but the market is consolidating around “blue chips.” DeFi’s casino era is fading: direct lending volumes have halved since 2021, and open interest has dropped from $40B to $6B. Yet, institutional DeFi is quietly scaling, with TradFi market makers now taking $100M+ loans on-chain. “The trend is institutionalization, standardization, and productization,” observes Sid Powell of Maple Finance.

With the US targeting on-chain market leadership by 2027 and regulatory clarity on the horizon, the message is clear: the next decade belongs to quality, not quantity. The Darwinian shakeout is underway—only the strongest protocols will survive the institutional era.

DeFi lending is no longer a playground for crypto diehards—it’s quietly becoming the backbone of tomorrow’s capital markets.

After the excesses of 2021–2022, the sector has shed its “Wild West” reputation. Outstanding crypto loans have shrunk to $20–25B, less than half their peak, but what’s left is leaner, more transparent, and increasingly institutional. “The direction of capital markets is it’s gonna be settling more and more in stablecoins,” says Sid Powell of Maple. “It’s almost inconceivable that it’s gonna hit some level and stop where people continue to decide to use fiat.” The collapse of centralized lenders like Genesis and BlockFi has forced protocols to adopt tri-party custody and on-chain transparency as standard, with blue-chip collateral (BTC, ETH) now the norm.

Aave, the sector’s bellwether, boasts $23B in active loans and $2.85T in all-time supplied assets—enough to rank as the 42nd largest US bank by deposits. Founder Stani Kulechov sees DeFi as “the cornerstone of all blockchains,” with risk-based pricing and RWA collateralization drawing in both fintechs and legacy banks. Meanwhile, the rise of tokenized strategies—think off-the-shelf basis trades and yield-bearing stablecoins like Syrup USD—signals a shift from bespoke risk to productized, regulated yield.

Institutions are no longer on the sidelines. BlackRock, Franklin Templeton, and JPMorgan are piloting tokenized funds and BTC-backed lending, while protocols like Aave’s Horizon are bridging DeFi and TradFi with real-world assets. The next frontier? Syndication and securitization of crypto-backed loans, potentially unlocking hundreds of billions in capital.

DeFi lending is evolving from a speculative sideshow to a structural pillar of global finance. The winners will be those who master risk, transparency, and the art of bridging worlds.

Wall Street’s old guard is no longer content to spectate—legacy finance is engineering its way into crypto’s core.

Stablecoins have become the “ChatGPT moment” for digital assets, with Citigroup and peers eyeing issuance as both existential threat and lucrative bridge. “Stablecoins have created a ChatGPT moment for crypto because we’re seeing consumers really use it, in a viral way,” says Tom Lee of Fundstrat, noting that banks are waking up to the business model. The numbers are hard to ignore: banks still capture 4% of global GDP, but blockchain rails threaten those margins, while Visa’s 2–3% per transaction is squarely in the crosshairs.

Corporate treasuries are following MicroStrategy’s $MSTR ( ▼ 0.74% ) playbook, using convertible bonds and preferred equity to amass digital assets—fueling a new class of public Bitcoin and Ethereum treasury companies. “The creative approach, their ability to very efficiently issue capital and then funnel that capital into Bitcoin has been the big driver,” observes Lance Vitanza of TD Cohen, as MicroStrategy’s $13B YTD Bitcoin gains and 30% yield guidance set the tone.

On the protocol side, Aave is evolving to court institutions, with $23B in active loans and new products like Horizon for real-world assets. Founder Stani Kulechov argues, “The best place to actually handle systemic risk is a system like DeFi… you can actually increase the resiliency versus in a closed system.” Meanwhile, tokenized private credit is inching toward the mainstream—$15B on-chain versus $1.6T in TradFi—with platforms like Figure Markets offering 9% yields on tokenized home equity loans.

TradFi and crypto are converging not as rivals, but as “frenemies” engineering a new financial order—one where capital, compliance, and code are inextricably linked. The next phase won’t be about disruption, but about who can build the most resilient bridges.

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.