15 posts tagged with "Investment Research"

What if the most transformative shift in global finance isn't coming from Silicon Valley disruptors or crypto-native protocols—but from Wall Street itself? According to Bernstein, one of the most respected research firms on the Street, that shift is already underway. In early January 2026, the firm declared that digital assets have "likely bottomed" and that we're entering a "tokenization supercycle" that will fundamentally reshape how assets move, settle, and store value across the global financial system.

This isn't the usual crypto hype. When Bernstein—a firm that manages billions in traditional assets—says blockchain is "emerging financial infrastructure rather than speculative innovation," institutional money listens. And in 2026, that money is flowing.

January 2026 opened with a surprise: the largest weekly crypto fund outflows since November 2025. Digital asset investment products hemorrhaged $1.73 billion in a single week, with Bitcoin and Ethereum bearing the brunt of institutional redemptions. But beneath the alarming headline lies a more nuanced story—one of strategic portfolio rebalancing, shifting macro expectations, and the maturing relationship between traditional finance and digital assets.

The exodus wasn't panic. It was calculation.

The Anatomy of $1.73 Billion in Outflows​

According to CoinShares, the week ending January 26, 2026 saw digital asset investment products lose $1.73 billion—the steepest decline in institutional crypto exposure since mid-November 2025. The breakdown reveals clear winners and losers in the capital allocation game.

Bitcoin led the exodus with $1.09 billion in outflows, representing 63% of total withdrawals. BlackRock's iShares Bitcoin Trust (IBIT), the industry's largest spot ETF, alone faced $537 million in redemptions during that week, coinciding with a 1.79% drop in Bitcoin's price.

Ethereum followed with $630 million fleeing ETH products, extending a brutal two-month period where Ether ETFs lost over $2 billion. The second-largest crypto by market cap continues to struggle for institutional relevance in an environment increasingly dominated by Bitcoin and emerging alternatives.

XRP saw $18.2 million in withdrawals as early enthusiasm for the newly launched XRP ETFs cooled rapidly.

The sole bright spot? Solana attracted $17.1 million in fresh capital, demonstrating that institutional money isn't leaving crypto entirely—it's just getting more selective.

Geography Tells the Real Story​

Regional flow patterns reveal a striking divergence in institutional sentiment. The United States accounted for nearly $1.8 billion of total outflows, suggesting American institutions drove the entire selloff—and then some.

Meanwhile, European and North American counterparts saw opportunity in the weakness:

• Switzerland: $32.5 million in inflows
• Canada: $33.5 million in inflows
• Germany: $19.1 million in inflows

This geographic split suggests the exodus wasn't about crypto fundamentals deteriorating globally. Instead, it points to U.S.-specific factors: regulatory uncertainty, tax considerations, and shifting macroeconomic expectations unique to American institutional portfolios.

The Two-Month Context: $4.57 Billion Vanishes​

To understand January's outflows, we need to zoom out. The 11 spot Bitcoin ETFs cumulatively lost $4.57 billion over November and December 2025—the largest two-month redemption wave since their January 2024 debut. November alone saw $3.48 billion exit, followed by $1.09 billion in December.

Bitcoin's price fell 20% during this period, creating a negative feedback loop: outflows pressured prices, declining prices triggered stop-losses and redemptions, which fueled further outflows.

Globally, crypto ETFs suffered $2.95 billion in net outflows during November, marking the first month of net redemptions in 2025 after a year of record-breaking institutional adoption.

Yet here's where the narrative gets interesting: after hemorrhaging capital in late 2025, Bitcoin and Ethereum ETFs recorded $645.8 million in inflows on January 2, 2026—the strongest daily inflow in over a month. That single-day surge represented renewed confidence, only to be followed weeks later by the $1.73 billion exodus.

What changed?

Tax Loss Harvesting: The Hidden Hand​

Year-end crypto outflows have become predictable. U.S. spot Bitcoin ETFs recorded eight consecutive days of institutional selling totaling approximately $825 million in late December, with analysts attributing the sustained pressure primarily to tax loss harvesting.

The strategy is straightforward: investors sell losing positions before December 31 to offset capital gains, reducing their tax liability. Then, in early January, they re-enter the market—often into the same assets they just sold—capturing the tax benefit while maintaining long-term exposure.

CPA firms noted falling crypto prices put investors in prime position for tax-loss harvesting, with Bitcoin's 20% decline creating substantial paper losses to harvest. The pattern reversed in early 2026 as institutional capital re-allocated to crypto, signaling renewed confidence.

But if tax loss harvesting explains late December outflows and early January inflows, what explains the late January exodus?

The Fed Factor: Rate Cut Hopes Fade​

CoinShares cited dwindling expectations for interest rate cuts, negative price momentum, and disappointment that digital assets have yet to benefit from the so-called debasement trade as key drivers behind the pullback.

The Federal Reserve's January 2026 policy decision to pause its cutting cycle, leaving rates at 3.5% to 3.75%, shattered expectations for aggressive monetary easing. After three rate cuts in late 2025, the Fed signaled it would hold rates steady for the first quarter of 2026.

The December 2025 "dot plot" showed significant divergence among policymakers, with similar numbers expecting no rate cuts, one rate cut, or two rate cuts for 2026. Markets had priced in more dovish action; when it didn't materialize, risk assets sold off.

Why does this matter for crypto? Fed rate cuts increase liquidity and weaken the dollar, boosting crypto valuations as investors seek inflation hedges and higher returns. Falling rates tend to increase risk appetite and support crypto markets.

When rate cut expectations evaporate, the opposite happens: liquidity tightens, the dollar strengthens, and risk-off sentiment drives capital into safer assets. Crypto, still viewed by many institutions as a speculative, high-beta asset, gets hit first.

Yet here's the counterpoint: Kraken noted that liquidity remains one of the most relevant leading indicators for risk assets, crypto included, and reports indicate the Fed intends to buy $45 billion in Treasury bills monthly beginning January 2026, which could boost financial system liquidity and drive investment into risk assets.

Capital Rotation: From Bitcoin to Alternatives​

The emergence of new cryptocurrency ETFs for XRP and Solana diverted capital from Bitcoin, fragmenting institutional flows across a broader set of digital assets.

Solana's $17.1 million weekly inflow during the exodus week wasn't an accident. The launch of Solana spot ETFs in late 2025 gave institutions a new vehicle for crypto exposure—one that offered 6-7% staking yields and exposure to the fastest-growing DeFi ecosystem.

Bitcoin, by contrast, offers no yield in ETF form (at least not yet, though staking ETFs are coming). For yield-hungry institutions comparing a 0% return Bitcoin ETF against a 6% staking Solana ETF, the math is compelling.

This capital rotation signals maturation. Early institutional crypto adoption was binary: Bitcoin or nothing. Now, institutions are allocating across multiple digital assets, treating crypto as an asset class with internal diversification rather than a monolithic bet on one coin.

Portfolio Rebalancing: The Unseen Driver​

Beyond tax strategies and macro factors, simple portfolio rebalancing likely drove substantial outflows. After Bitcoin surged to new all-time highs in 2024 and maintained elevated prices through much of 2025, crypto's share of institutional portfolios grew significantly.

Year-end prompted institutional investors to rebalance portfolios, favoring cash or lower-risk assets, as fiduciary mandates required trimming overweight positions. A portfolio designed for 2% crypto exposure that grew to 4% due to price appreciation must be trimmed to maintain target allocations.

Reduced liquidity during the holiday period exacerbated price impacts, as analysts noted: "The price is compressing as both sides wait for liquidity to return in January".

What Institutional Outflows Signal for Q1 2026​

So what does the $1.73 billion exodus actually mean for crypto markets in 2026?

1. Maturation, Not Abandonment​

Institutional outflows aren't necessarily bearish. They represent the normalization of crypto as a traditional asset class subject to the same portfolio management disciplines as equities and bonds. Tax loss harvesting, rebalancing, and tactical positioning are signs of maturity, not failure.

Grayscale's 2026 outlook expects "a steadier advance in prices driven by institutional capital inflows in 2026," with Bitcoin's price likely reaching a new all-time high in the first half of 2026. The firm notes that after months of tax-loss harvesting in late 2025, institutional capital is now re-allocating to crypto.

2. The Fed Still Matters—A Lot​

Crypto's narrative as a "digital gold" inflation hedge has always competed with its reality as a risk-on, liquidity-driven asset. January's outflows confirm that macro conditions—particularly Federal Reserve policy—remain the dominant driver of institutional flows.

The Fed's current more cautious stance is weakening sentiment recovery in the crypto market compared to previous optimistic expectations of a "full dovish shift." However, from a medium to long-term perspective, the expectation of declining interest rates may still provide phased benefits for high-risk assets like Bitcoin.

3. Geographic Divergence Creates Opportunity​

The fact that Switzerland, Canada, and Germany added to crypto positions while the U.S. shed $1.8 billion suggests differing regulatory environments, tax regimes, and institutional mandates create arbitrage opportunities. European institutions operating under MiCA regulations may view crypto more favorably than U.S. counterparts navigating ongoing SEC uncertainty.

4. Asset-Level Selection Is Here​

The Solana inflows amid Bitcoin/Ethereum outflows mark a turning point. Institutions are no longer treating crypto as a single asset class. They're making asset-level decisions based on fundamentals, yields, technology, and ecosystem growth.

This selectivity will separate winners from losers. Assets without clear value propositions, competitive advantages, or institutional-grade infrastructure will struggle to attract capital in 2026.

5. Volatility Remains the Price of Admission​

Despite $123 billion in Bitcoin ETF assets under management and growing institutional adoption, crypto remains subject to sharp, sentiment-driven swings. The $1.73 billion weekly outflow represents just 1.4% of total Bitcoin ETF AUM—a relatively small percentage that nonetheless moved markets significantly.

For institutions accustomed to Treasury bond stability, crypto's volatility remains the primary barrier to larger allocations. Until that changes, expect capital flows to remain choppy.

The Road Ahead​

The $1.73 billion crypto fund exodus wasn't a crisis. It was a stress test—one that revealed both the fragility and resilience of institutional crypto adoption.

Bitcoin and Ethereum weathered the outflows without catastrophic price collapses. Infrastructure held up. Markets remained liquid. And perhaps most importantly, some institutions saw the selloff as a buying opportunity rather than an exit signal.

The macro picture for crypto in 2026 remains constructive: the convergence of institutional adoption, regulatory progress, and macroeconomic tailwinds makes 2026 a compelling year for crypto ETFs, potentially marking the "dawn of the institutional era" for crypto.

But the path won't be linear. Tax-driven selloffs, Fed policy surprises, and capital rotation will continue to create volatility. The institutions that survive—and thrive—in this environment will be those that treat crypto with the same rigor, discipline, and long-term perspective they apply to every other asset class.

The exodus is temporary. The trend is undeniable.

For developers and institutions building on blockchain infrastructure, reliable API access becomes critical during periods of volatility. BlockEden.xyz provides enterprise-grade node infrastructure across Bitcoin, Ethereum, Solana, and 20+ other networks, ensuring your applications remain resilient when markets are anything but.

Sources​

• Crypto Funds Bleed 1.73 Billion Dollars in Worst Week Since Late 2025
• Bitcoin, Ethereum ETFs Bleed as Crypto Funds Lose $1.73 Billion, Largest Since November
• Digital Asset Products See $1.73 Billion Outflow | Phemex News
• Bitcoin ETFs lose record $4.57 billion in two months
• Crypto ETFs listed globally suffered net outflows of US$2.95 billion in November
• "Tax Loss Harvesting" Drives $825M Outflow From Bitcoin ETFs This Week: Analyst
• CPA: Falling crypto prices put investors in position for tax-loss harvesting
• The Institutional Rebound in Crypto ETFs: A Strategic Entry Point for 2026?
• How The Fed Impacts Stocks, Bonds, Crypto And More | Bankrate
• The Federal Reserve's increasing divergence on the interest rate path for 2026
• What Could Be the Federal Reserve's Impact on the Crypto Market in 2026?
• The road ahead for crypto markets in 2026 - Kraken Blog
• 2026 Digital Asset Outlook: Dawn of the Institutional Era | Grayscale
• Crypto's Year-Start Rally and Macro Catalysts for Institutional Adoption in 2026

Search "Mutuum Finance" on Google and you will find page after page of sponsored press releases proclaiming a revolutionary DeFi lending protocol, $20 million in presale funding, and projections of 2,400% returns. Search "Mutuum Finance scam" and you will find trust scores as low as 14 out of 100, user complaints about vanishing balances, and an anonymous team behind a product that does not yet exist.

Both of these realities are true simultaneously. And that tension makes Mutuum Finance one of the most instructive case studies in how to evaluate — and potentially avoid — crypto presale projects in 2026.

Mutuum Finance (MUTM) is marketing itself as the next major DeFi lending protocol. The presale has attracted over 18,900 investors and nearly $20 million in funding across seven phases. The token price has risen from $0.01 in Phase 1 to $0.04 in Phase 7, with a confirmed launch price of $0.06. The project claims dual lending models, a Halborn security audit, and a CertiK token scan score of 90 out of 100.

But beneath the press releases lies a pattern that experienced crypto investors have seen before — and one that demands scrutiny.

What Mutuum Finance Claims to Be​

At its core, Mutuum Finance describes a decentralized, non-custodial liquidity protocol for lending, borrowing, and earning interest through overcollateralized crypto loans. The design, on paper, is not unusual. It mirrors established protocols like Aave and Compound with some structural additions.

Peer-to-Contract (P2C) Lending: Users deposit assets into shared liquidity pools to earn yield and receive mtTokens — interest-bearing tokens that appreciate as borrowers repay loans. Borrowers provide overcollateralized collateral and can choose between variable and stable interest rates. This model is functionally identical to how Aave V3 operates.

Peer-to-Peer (P2P) Lending: A second market supports direct lending and borrowing of more volatile assets (the project names PEPE and SHIB as examples) within fixed loan-to-value parameters. By isolating speculative tokens in a dedicated environment, the protocol claims to maintain security for its core pools.

Overcollateralized Stablecoin: Mutuum describes plans for a USD-pegged stablecoin minted from the protocol treasury using mint-and-burn mechanics — similar in concept to Aave's GHO stablecoin.

Buy-and-Redistribute Mechanism: Platform fees are used to purchase MUTM on the open market, which is then redistributed to users who stake mtTokens in a safety module.

The total token supply is 4 billion MUTM, with 45.5% (1.82 billion tokens) allocated to the presale. The project is based in Dubai and plans to deploy on Ethereum with Layer 2 support and Chainlink oracle integration.

None of these features are technically novel. Every element exists in production across Aave, Compound, Morpho, or SparkLend. The question is not whether the design is theoretically sound — it is whether the team can execute it.

The Red Flags​

1. Anonymous Team​

The Mutuum Finance team is anonymous. No founders, developers, or advisors are publicly identified. In a space where rug pulls and exit scams remain common, team anonymity is the single most significant risk factor for presale investors.

Anonymous teams are not inherently fraudulent — Bitcoin's Satoshi Nakamoto is the most famous example. But Satoshi never asked anyone for $20 million before shipping a working product. When a project raises substantial capital from retail investors without public accountability for the people controlling those funds, the risk profile changes fundamentally.

2. No Working Product​

As of January 2026, Mutuum Finance has deployed a basic smart contract to the Sepolia testnet. No frontend interface is publicly available. No transactions have been observed on the testnet. No users have tested the protocol in any meaningful capacity.

The project has raised nearly $20 million for a product that exists only as a whitepaper description and a set of audited smart contracts. The V1 protocol is described as approaching testnet readiness, with mainnet activation expected sometime in 2026 — but no firm date has been announced.

For comparison: Aave launched its mainnet in January 2020 after extensive testnet deployment and public beta testing. Compound V1 shipped in 2018 before raising significant capital. In the established DeFi lending space, products ship before presales, not the reverse.

3. $240 Million Launch Valuation​

At the confirmed launch price of $0.06 per token with 4 billion total supply, Mutuum Finance's fully diluted valuation (FDV) at listing is $240 million. For context:

• Aave has $43 billion in TVL and processes trillions in cumulative deposits
• Compound holds $3.15 billion in TVL after seven years of operation
• Morpho became the largest lending market on Base with $1 billion borrowed

Mutuum has zero TVL, zero users, and zero production transactions. A $240 million FDV for an unproven protocol with no working product is atypical even by crypto standards, where inflated presale valuations frequently precede sharp post-listing declines.

4. Aggressive Paid Marketing​

Googling "Mutuum Finance MUTM" returns an overwhelming volume of sponsored content and press releases — primarily distributed through GlobeNewswire and syndicated across financial news outlets. The language is consistently promotional, with phrases like "300% growth confirmed" and "most promising altcoin under $1."

Organic community discussion is sparse. Independent reviews are overwhelmingly negative or cautionary. The ratio of paid marketing to genuine user engagement is inverted compared to legitimate DeFi protocols, which typically build communities organically before launching marketing campaigns.

5. Conflicting Trust Scores​

Third-party trust assessment tools show conflicting signals:

• Scam Detector rates mutuum.finance at 14.2 out of 100 ("Controversial. High-Risk. Unsafe") but rates mutuum.com at 86.1 ("Authentic. Trustworthy. Secure")
• Gridinsoft rates mutuum.finance at 39 out of 100 with "multiple red flags"
• Scamadviser shows a very low trust score with user reviews averaging 1.3 stars

The discrepancy between domains adds confusion. Users have reported investing small amounts only to find their balances showing zero the following day, with no response from the team.

What the Audits Actually Mean​

Mutuum Finance highlights two security credentials: a Halborn Security audit and a CertiK token scan score of 90 out of 100. These are real companies performing legitimate work. But understanding what they cover — and what they do not — is critical.

Halborn's audit reviewed smart contract components including liquidation operations, collateral valuation, borrowing logic, and interest rate calculations. This confirms that the code, as written, functions as intended. It does not verify that the team is honest, that the business model is viable, or that funds are safe from insider mismanagement.

CertiK's token scan evaluates the token contract for common vulnerabilities — honeypot mechanisms, hidden minting functions, and similar technical risks. A score of 90 out of 100 means the token contract itself is technically clean. It says nothing about the project's legitimacy, the team's intentions, or the probability of post-launch support.

Both audits are necessary but not sufficient conditions for trust. Many projects that eventually failed or turned out to be fraudulent held valid security audits. An audit tells you the code works; it does not tell you the people behind it are trustworthy.

The $50,000 bug bounty program is a positive signal, but modest by industry standards — Aave's bug bounty has paid out millions.

The DeFi Lending Market in 2026​

To evaluate whether Mutuum Finance addresses a genuine market need, it helps to understand the competitive landscape.

DeFi lending has matured significantly. Total outstanding loans across major protocols rose 37.2% year-over-year in 2025. Aave dominates with 56.5% of total DeFi debt, having surpassed $71 trillion in cumulative deposits. Compound remains a foundational protocol with $3.15 billion in TVL. Morpho has emerged as a credible competitor, particularly on Base where it overtook Aave as the largest lending market.

SparkLend reached $7.9 billion in TVL by combining conservative collateral requirements with innovative yield strategies. Even among newer entrants, the successful ones launched working products before seeking significant capital.

The market for overcollateralized lending is real and growing. The question is whether there is room for a new entrant that brings no technical innovation, no established user base, and no production track record — especially one seeking a $240 million valuation.

The honest answer is: probably not, unless the team delivers something genuinely differentiated. The P2P lending model for volatile assets is the most interesting aspect of the design, but it has not been built yet, let alone tested.

What Investors Should Consider​

For anyone who has already participated in the Mutuum Finance presale — or is considering it — here is the framework for making informed decisions:

The bull case: The smart contracts are audited. The dual lending model is conceptually sound. If the team delivers a working product that attracts users and TVL, early presale participants bought at a significant discount to launch price. The overcollateralized stablecoin adds a revenue diversification angle. Multi-chain deployment could expand the addressable market.

The bear case: Anonymous team, no working product, $240 million launch FDV, overwhelming paid marketing relative to organic adoption, conflicting trust scores, and user complaints. The project structure — where 45.5% of tokens go to presale investors at escalating prices with vesting periods — creates mechanical sell pressure at launch. Historical data shows 88% of airdropped and presale tokens lose value within three months.

The realistic assessment: Legitimate DeFi lending protocols build products, attract users, and then raise capital. Mutuum Finance has inverted this sequence. That does not automatically make it a scam — some legitimate projects run presales before launch. But it dramatically increases the risk profile, and the weight of circumstantial evidence (anonymity, no product, aggressive marketing, low trust scores) tilts the analysis toward extreme caution.

The safest approach to any presale is simple: never invest more than you can afford to lose entirely, and apply the same skepticism you would bring to any unproven investment opportunity that promises extraordinary returns.

DeFi lending is a $50+ billion market with room for innovation. But the innovations that matter — undercollateralized lending, real-world asset integration, cross-chain liquidity — are being built by teams with public identities, working products, and organic communities. Mutuum Finance has none of these. Whether it will develop them remains an open question — one that only time and delivered code can answer.

This article is for educational purposes and does not constitute investment advice. Always conduct independent research before participating in any crypto presale or investment opportunity.

The median altcoin fell 79 % in 2025. The October 10 liquidation cascade wiped out more than $20 billion in notional positions — eclipsing the Terra/Luna and FTX unwinds. And yet, 151 public companies ended the year holding $95 billion in digital assets, up from fewer than ten in January 2021.

Pantera Capital, the crypto industry's oldest institutional fund with $4.8 billion under management and a 265-company portfolio, has published its most detailed annual outlook yet. Written by managing partner Cosmo Jiang, partner Paul Veradittakit, and research analyst Jay Yu, the letter distills nine predictions and twelve theses into a single message: 2026 is the year crypto stops being a casino and starts being infrastructure. That thesis deserves scrutiny.

The State of Play: A Bear Market Hiding Inside a Bull Narrative​

Before looking forward, Pantera's backward glance is unusually candid for a fund letter. Bitcoin fell roughly 6 % in 2025, Ethereum dropped 11 %, Solana slid 34 %, and the broader token universe (excluding BTC, ETH, and stablecoins) declined 44 % from its late-2024 peak. The Fear & Greed Index touched FTX-collapse-era lows. Perpetual futures funding rates collapsed, signaling a leverage washout.

The culprit, Pantera argues, was not fundamentals but structure. Digital asset treasuries (DATs) exhausted their incremental buying power. Tax-loss selling, portfolio rebalancing, and CTA (commodity trading advisor) flows compounded the downturn. The result was a year-long bear market for everything except Bitcoin and stablecoins — a divergence that sets the stage for every prediction that follows.

The key statistic: 67 % of professional investment managers still have zero digital asset exposure, according to a Bank of America survey. Only 4.4 million Bitcoin addresses hold more than $10,000 in value, versus 900 million traditional investment accounts globally. The gap between institutional interest and institutional allocation is where Pantera sees the 2026 opportunity.

Prediction 1: "Brutal Pruning" of Corporate Bitcoin Treasuries​

The most provocative call is consolidation among digital asset treasury companies. By December 2025, 164 entities (including governments) held $148 billion in digital assets. Strategy (formerly MicroStrategy) alone holds 709,715 Bitcoin purchased for approximately $53.9 billion. BitMine, the largest corporate Ethereum holder, accumulated 4.2 million ETH valued at $12.9 billion.

Pantera's thesis: only one or two dominant players will survive per asset class. "Everyone else gets acquired or left behind." The math supports this. Smaller DATs face a structural disadvantage — they can't issue convertible notes at the same scale, they don't get the same premium-to-NAV, and they lack the brand recognition that drives retail flows.

This has direct implications for the 142 public companies operating corporate Bitcoin treasuries. Many face the same Grayscale GBTC-style discount risk we've analyzed previously — when premiums evaporate, these companies become worth less than their underlying holdings, triggering a death spiral of selling pressure.

Prediction 2: Real-World Assets Double (At Minimum)​

RWA TVL reached $16.6 billion by mid-December 2025 — approximately 14 % of total DeFi TVL. Pantera expects treasuries and private credit to at least double in 2026, with tokenized stocks growing faster thanks to an anticipated SEC "Innovation Exemption" for tokenized securities in DeFi.

The "surprise" call: one unexpected asset class — carbon credits, mineral rights, or energy — will surge. This aligns with the broader institutional consensus. Galaxy Digital predicts the SEC will provide exemptions to expand tokenized securities in DeFi (though those exemptions will be tested in court). Messari's thesis identifies RWA as a "systemic integration" pillar alongside AI and DePIN.

Pantera also singles out tokenized gold as a key RWA category, forecasting that blockchain-based gold tokens backed by physical bullion will become a cornerstone of DeFi collateral strategies — essentially positioning tokenized gold as a macro hedge embedded natively in on-chain lending markets.

Prediction 3: AI Becomes Crypto's Primary Interface​

This prediction has two layers. First, Pantera argues that AI will become the primary way users interact with crypto — conversational assistants that execute trades, provide portfolio analysis, and enhance security. Platforms like Surf.ai are cited as early examples.

Second, and more ambitiously, research analyst Jay Yu predicts that AI agents will mass-adopt x402, a blockchain-based payment protocol, with some services deriving over 50 % of revenue from AI-initiated micropayments. Yu specifically predicts Solana will surpass Base in x402 transaction volume.

The institutional implication: AI-mediated trading cycles will become mainstream. Not fully autonomous — Pantera acknowledges LLM-based autonomous trading is still experimental — but AI assistance will "gradually permeate user workflows of most consumer-facing crypto applications." The next crypto unicorn, they argue, may be an on-chain security firm using AI to achieve "100x safety improvements" over current smart-contract auditing.

This prediction has real numbers behind it. Current AI already achieves 95 % accuracy in Bitcoin transaction labeling for fraud detection. The gap between 95 % and 99.9 % — where institutions need it to be — is where the value creation happens.

Prediction 4: Bank Consortium Stablecoin and the $500B Market​

Stablecoins hit a $310 billion market cap in 2025, doubling since 2023 in a 25-month expansion. Pantera's boldest stablecoin call: ten major banks are exploring a consortium stablecoin pegged to G7 currencies, with ten European banks separately investigating a euro-pegged stablecoin. They predict at least one major bank consortium will release its stablecoin in 2026.

This aligns with broader industry momentum. Galaxy Digital predicts that top-three global card networks will route more than 10 % of cross-border settlement volume through public-chain stablecoins in 2026. Pantera forecasts the stablecoin market reaching $500 billion or more by year-end.

The tension: stablecoin growth benefits off-chain equity businesses more than token protocols. Pantera is refreshingly honest about this. Circle captured a $9 billion IPO valuation, Coinbase earns $908 million annually from USDC revenue sharing, and Stripe acquired Bridge for $1.1 billion — all equity value, not token value. For token holders, the stablecoin boom is infrastructure that enriches everyone except them.

Prediction 5: The Biggest Crypto IPO Year Ever​

The U.S. saw 335 IPOs in 2025 (a 55 % increase from 2024), including nine blockchain listings. Pantera portfolio companies Circle, Figure, Gemini, and Amber Group went public with a combined market cap of approximately $33 billion as of January 2026. Ledger is reportedly eyeing a $4 billion IPO with Goldman Sachs, Jefferies, and Barclays advising.

Pantera predicts 2026 will exceed 2025's IPO activity. The catalyst: 76 % of companies surveyed plan tokenized asset additions, with some targeting 5 %+ portfolio allocation to digital assets. As more crypto companies have auditable financials and regulatory compliance, the IPO pipeline deepens.

Prediction 6: A $1B+ Prediction Market Acquisition​

With $28 billion traded in prediction markets during 2025's first ten months (hitting an all-time high of $2.3 billion the week of October 20), Pantera predicts a buyout exceeding $1 billion — one that will not involve Polymarket or Kalshi. The targets: smaller platforms with institutional infrastructure that larger financial players want to acquire rather than build.

Yu separately predicts prediction markets will bifurcate into "financial" platforms (integrated with DeFi, supporting leverage and staking) and "cultural" platforms (localized, long-tail interest betting). This bifurcation creates acquisition targets at both ends.

How Pantera's Predictions Compare to the Consensus​

Pantera's outlook doesn't exist in isolation. Here's how it aligns with — and diverges from — other major institutional forecasts:

Five of six major firms agree that AI-crypto convergence will scale in 2026. The sharpest divergence is on Bitcoin price: Galaxy predicts $250,000, Bitwise expects new all-time highs in H1, while Pantera avoids a specific target — focusing instead on structural adoption metrics rather than price.

For accuracy context: historical prediction scorecards show Messari at 55 % accuracy, Bitwise at 50 %, Galaxy at 26 %, and VanEck at 10 %. Pantera's track record is harder to assess because their predictions tend to be structural rather than price-based — which is arguably more useful for portfolio construction.

The Uncomfortable Truth Pantera Acknowledges​

The most valuable section of Pantera's letter isn't the predictions — it's the honest assessment of what went wrong in 2025. They identify three structural problems that don't have obvious 2026 solutions:

Value accrual failure. Governance tokens broadly failed to capture protocol revenue. Pantera cites Aave, Tensor, and Axelar as cases where token holders didn't benefit proportionally from platform growth. Yu predicts "equity-exchangeable tokens" may emerge as a fix, but the regulatory framework for token-equity convergence remains unclear.

Slowing on-chain activity. Layer-one revenues, dApp fees, and active addresses all decelerated in late 2025. The infrastructure buildout has dramatically reduced transaction costs — great for users, challenging for L1/L2 token valuations that depend on fee revenue.

Stablecoin value leakage. The $310 billion stablecoin market enriches issuers (Circle, Tether) and distributors (Coinbase, Stripe) — equity businesses, not token-governed protocols. This creates a paradox: the fastest-growing crypto use case may not benefit crypto token holders.

These aren't problems Pantera claims to solve. But acknowledging them puts the bullish predictions in useful context: even the industry's most optimistic institutional investor recognizes that 2026's growth may flow to equity rather than tokens.

What This Means for Builders and Investors​

Pantera's 2026 framework suggests three actionable themes:

Follow the equity, not just the tokens. If the biggest crypto value creation happens through IPOs, bank stablecoins, and AI security companies, portfolio construction should reflect that. The era of pure token speculation is giving way to a hybrid equity-token landscape.

The consolidation trade is real. "Brutal pruning" of DATs, prediction market acquisitions, and institutional-grade infrastructure suggest that 2026 rewards scale and compliance over innovation and experimentation. For builders, this means the bar for launching new protocols has risen dramatically.

AI is the distribution channel, not just the product. Pantera's emphasis on AI as the "interface layer" for crypto implies that the next wave of crypto adoption won't come from better protocols — it will come from AI assistants that make existing protocols accessible to the 67 % of investment managers who currently have zero crypto exposure.

The crypto industry has been promising "the year of infrastructure" for half a decade. Pantera's $4.8 billion bet is that 2026 is finally the year it delivers. Whether that's conviction or marketing, the data they cite — 151 public companies holding $95 billion, $310 billion in stablecoins, $28 billion in prediction markets — makes the case that the infrastructure is already here. The question is whether it generates returns for token holders or only for the equity investors Pantera's own fund structure serves.

This article is for educational purposes and does not constitute investment advice. Always conduct independent research before making investment decisions.

The tokenized real-world asset market just crossed $33 billion. But if you look beneath the headline number, a striking imbalance emerges: private credit commands 58% of all tokenized RWA flows, treasuries take 34%, and equities—the asset class most people would expect to lead—barely registers at 2%.

This isn't a random distribution. It's the market telling us exactly which assets are ready for tokenization and which face structural barriers that no amount of blockchain innovation can immediately solve.

In the first quarter of 2025 alone, 1.8 million crypto projects died. That's not a typo—it's nearly half of all project failures ever recorded, compressed into just three months. The carnage included well-funded startups backed by tier-one VCs, heavily marketed tokens that debuted on major exchanges, and political memecoins that briefly touched $10 billion valuations before collapsing 90%.

The crypto graveyard of 2025 isn't just a cautionary tale. It's a masterclass in what separates projects that survive from those that become case studies in failure. Here's what went wrong, who fell hardest, and the patterns every builder and investor should recognize.

The Numbers: A Year of Unprecedented Failure​

The statistics are staggering. According to CoinGecko data, 52.7% of all cryptocurrencies ever launched have now failed—meaning they stopped trading entirely or dropped to zero liquidity. Of the nearly 7 million tokens listed on GeckoTerminal since 2021, 3.7 million are now dead coins.

But the velocity of death in 2025 broke all records:

The math is brutal: with 73,000 tokens launching daily and less than 2% surviving past their first week, the crypto space became a factory for failure.

The Memecoin Massacre: 98% Failure Rate​

No category collapsed harder than memecoins. A Solidus Labs report found that 98.6% of tokens launched on Pump.fun—the dominant memecoin launchpad on Solana—were rug pulls or pump-and-dump schemes.

Of the 7+ million tokens issued through Pump.fun since January 2024, only 97,000 maintained even $1,000 in liquidity. In August 2025 alone, 604,162 tokens launched but just 4,510 "graduated" to real trading—a 0.75% success rate.

The poster children for memecoin failure were the political tokens:

TRUMP Token: Launched to celebrate the incoming administration, TRUMP rocketed from under $10 to $70 within 48 hours of inauguration, briefly hitting a fully diluted value above $10 billion. Within weeks, it collapsed 87% from peak. Reports emerged that insiders profited over $100 million by buying before public launch.

MELANIA Token: Following the same playbook, MELANIA launched to fanfare and promptly crashed 97% from its high.

Pi Network: The "mine crypto on your phone" project spent years building hype among millions of users. When the token finally launched and price discovery met unlock schedules, Pi spiked to nearly $2.98 in February before collapsing over 90% to around $0.20 by year-end.

The memecoin market as a whole went from a $150.6 billion peak in December 2024 to $47.2 billion by November 2025—a 69% collapse.

Case Study: Movement Labs—How Opaque Token Deals Kill Credibility​

Movement Labs offered something more substantial than meme tokens: a Move-VM-powered Ethereum scaling solution with slick marketing and prominent exchange listings. Yet by mid-2025, it had become "a case study in how opaque token deals destroy credibility faster than any technical failure."

What happened: Reports surfaced that Movement handed roughly 66 million MOVE tokens—approximately 5% of total supply, worth $38 million at the time—to a market maker linked to Web3Port through an intermediary. Most of those tokens hit the market immediately.

The fallout:

• Coinbase delisted MOVE as the scandal unfolded
• The foundation suspended and terminated co-founder Rushi Manche
• MOVE crashed 97% from its December 2024 all-time high
• An external governance review was commissioned

The lesson: Even technically sound projects can implode when token economics and insider dealings undermine trust. The market punishes opacity ruthlessly.

Case Study: Mantra (OM)—The $6 Billion Evaporation​

Mantra positioned itself as the premium play in the RWA (Real-World Asset) tokenization narrative. A January 2025 partnership with UAE's DAMAC Group to tokenize $1 billion in real estate assets seemed to validate the vision.

On April 13, 2025, OM crashed from approximately $6.30 to under $0.50 in a single day—a 90%+ collapse that erased over $6 billion in market cap within hours.

The red flags that preceded the crash:

• OM's fully diluted valuation reached $10 billion while total value locked (TVL) was just $4 million
• Token supply was abruptly doubled from 1 billion to 2 billion
• In the week before the crash, at least 17 wallets deposited 43.6 million OM ($227 million) to exchanges
• Two of these addresses were linked to Laser Digital according to Arkham data

The official story vs. reality: Co-founder John Patrick Mullin blamed "reckless forced closures initiated by centralized exchanges." Critics pointed to the concentration—multiple sources alleged the team controlled 90% of token supply.

OKX founder Star Xu called it "a big scandal to the whole crypto industry," promising to release investigation reports.

Whether technically a "rug pull" or not, Mantra became a textbook example of how disconnected valuations and concentrated token ownership create catastrophic risk.

The GameFi and NFT Apocalypse​

Two narratives that defined the 2021-2022 bull market became graveyards in 2025:

GameFi: Down 75.1% year-to-date, making it the second-worst performing crypto narrative (behind only DePIN at -76.7%). Projects that shut down included COMBO, Nyan Heroes, and Ember Sword. The GameFi market collapsed from $237.5 billion to $90.3 billion.

NFTs: The market fell from $92 billion to $25 billion. Platforms like Royal, RECUR, and X2Y2 closed operations entirely.

AI Tokens: Lost roughly 75% of combined value year-over-year, wiping out an estimated $53 billion from the market—despite AI being the hottest narrative in tech.

The pattern: narrative-driven valuations that far outpaced actual usage or revenue.

The Warning Signs: How to Spot a Dying Project​

Across the wreckage of 2025, consistent warning signs emerged:

1. Valuation-TVL Disconnect​

Mantra's $10 billion FDV vs. $4 million TVL was an extreme example of a common problem. When a project's market cap dwarfs actual usage metrics by 1000x or more, that gap eventually closes—usually violently.

2. Token Unlock Concentration​

Movement's market maker deal and Mantra's concentrated holdings demonstrate how token distribution can make or break a project. Check:

• Vesting schedules and unlock timing
• Wallet concentration (top 10 holders %)
• Recent large deposits to exchanges before major announcements

3. Development Activity Stagnation​

Use GitHub and other repositories to check commit frequency. If the last meaningful code commit was six months ago, the project may already be dying.

4. Transaction Volume vs. Hype​

Blockchain explorers reveal the truth. Low daily transactions or minimal wallet activity despite high social media presence suggests artificial demand.

5. Team Transparency Issues​

Pseudonymous teams aren't inherently bad—Bitcoin had Satoshi—but combine anonymity with large insider allocations and you have a recipe for disaster.

Lessons for Builders​

The survivors of 2025 share common traits:

1. Revenue Over Narrative Projects that generated actual fees, usage, and economic activity—not just token speculation—weathered the storm. Hyperliquid capturing 53% of on-chain trading revenue demonstrates that real business models matter.

2. Transparent Token Economics Clear vesting schedules, on-chain verifiable allocations, and honest communication about insider sales build the trust that sustains communities through downturns.

3. Regulatory Pragmatism Projects that ignored legal frameworks found themselves delisted, sued, or shut down. The FCA's placement of Pump.fun on its Warning List and the class-action lawsuits that followed show regulators are paying attention.

4. Focus on User Experience As the a16z State of Crypto report noted, 2025 marked the transition from infrastructure-building to application-building. Revolutionary tech that's inaccessible won't gain adoption.

The Systemic Risk: Security Failures Beyond Individual Projects​

Individual project failures were painful. The systemic security crisis was catastrophic.

Total crypto losses from hacks and exploits crossed $3.5 billion in 2025, making it one of the most damaging years in crypto history. The February ByBit hack alone—at $1.5 billion—represented the largest DeFi breach ever recorded.

The $150 billion in forced liquidations throughout the year, including a single 24-hour period that erased $20 billion in leveraged positions, demonstrated how interconnected the ecosystem has become.

What's Next: The 2026 Outlook​

The carnage of 2025 cleared out the speculative excess, but the underlying infrastructure kept building. Stablecoin volumes continued growing, institutional adoption accelerated, and the survivors emerged stronger.

For builders entering 2026:

• Focus on real utility over token price
• Prioritize transparency in all token dealings
• Build for users who need your product, not speculators hoping for returns
• Treat regulatory compliance as a feature, not an obstacle

The crypto graveyard of 2025 holds valuable lessons for those willing to learn. The 1.8 million projects that died in Q1 alone represent billions in lost capital and countless broken promises. But buried among the failures are the patterns that distinguish lasting projects from elaborate exits.

The best time to build is when speculative money has left. The projects starting now, with the lessons of 2025 fresh in mind, may well define the next cycle.

BlockEden.xyz provides enterprise-grade blockchain infrastructure designed for the long term. We believe in building sustainable technology that serves real users, not speculation cycles. Explore our API services to build on foundations designed to last.

Overview​

Digital asset treasuries (DATs) are publicly listed corporations whose primary business model is to accumulate and manage crypto‑tokens such as ETH or SOL. They raise capital through stock offerings or convertible bonds and use the proceeds to purchase tokens, stake them to earn yield, and grow tokens per share via savvy financial engineering. DATs blend features of corporate treasuries, investment trusts and DeFi protocols; they let mainstream investors gain exposure to crypto without holding the coins directly and operate like “on‑chain banks.” The following sections synthesise the visions of four influential leaders—Tom Lee (Fundstrat/BitMine), Joseph Lubin (Consensys/SharpLink), Sam Tabar (Bit Digital) and Cosmo Jiang (Pantera Capital)—who are shaping this emerging sector.

Tom Lee – Fundstrat Co‑founder & BitMine Chairman​

Long‑term thesis: Ethereum as the neutral chain for the AI–crypto super‑cycle​

• In 2025 Tom Lee pivoted the former Bitcoin miner BitMine into an Ethereum treasury company. He argues that AI and crypto are the two major investment narratives of the decade and both require neutral public blockchains, with Ethereum offering high reliability and a decentralised settlement layer. Lee describes ETH’s current price as a “discount to the future”—he believes that the combination of institutional finance and artificial intelligence will eventually need Ethereum’s neutral public blockchain to operate at scale, making ETH “one of the biggest macro trades of the next decade”.
• Lee believes tokenised real‑world assets, stablecoins and on‑chain AI will drive unprecedented demand for Ethereum. In a Daily Hodl interview he said ETH treasuries added over 234 k ETH in one week, pushing BitMine’s holdings above 2 million ETH. He explained that Wall Street and AI moving on‑chain will transform the financial system and most of this will happen on Ethereum, hence BitMine aims to acquire 5 % of ETH’s total supply, dubbed the “alchemy of 5 %”. He also expects ETH to remain the preferred chain because of pro‑crypto legislation (e.g., CLARITY & GENIUS Acts) and described Ethereum as the “neutral chain” favoured by both Wall Street and the White House.

DAT mechanics: building shareholder value​

• In Pantera’s 2025 blockchain letter, Lee explained how DATs can create value beyond token price appreciation. By issuing stock or convertible bonds to raise capital, staking their ETH, using DeFi to earn yield and acquiring other treasuries, they can increase tokens per share and maintain a NAV premium. He views stablecoins as the “ChatGPT story of crypto” and believes on‑chain cash flows from stablecoin transactions will support ETH treasuries.
• Lee emphasises that DATs have multiple levers that make them more attractive than ETFs: staking yields, velocity (rapid issuance of shares to acquire tokens) and liquidity (ability to raise capital quickly). In a Bankless discussion he noted that BitMine moved 12 × faster than MicroStrategy in accumulating crypto and described BitMine’s liquidity advantage as critical for capturing a NAV premium.
• He also stresses risk management. Market participants must differentiate between credible leaders and those issuing aggressive debt; investors should focus on execution, clear strategy and risk controls. Lee warns that mNAV premiums compress as more companies adopt the model and that DATs need to deliver performance beyond simply holding tokens.

Vision for the future​

Lee predicts a long super‑cycle in which Ethereum underpins tokenised AI economies and digital asset treasuries become mainstream. He foresees ETH reaching US $10–12 k in the near term and much higher over a 10–15 year time horizon. He also notes that major institutions like Cathie Wood and Bill Miller are already investing in DATs and expects more Wall Street firms to view ETH treasuries as a core holding.

Joseph Lubin – Consensys Founder & SharpLink Chairman​

ETH treasuries as storytelling and yield machines​

• Lubin argues that Ethereum treasury companies are more powerful than Bitcoin treasuries because ETH is productive. By staking tokens and using DeFi, treasuries can generate yield and grow ETH per share, making them “more powerful than Bitcoin treasuries”. SharpLink converts capital into ETH daily and stakes it immediately, creating compounding growth.
• He sees DATs as a way to tell the Ethereum story to Wall Street. On CNBC he explained that Wall Street pays attention to making money; by offering a profitable equity vehicle, DATs can communicate ETH’s value better than simple messaging about smart contracts. While Bitcoin’s narrative is easy to grasp (digital gold), Ethereum spent years building infrastructure—treasury strategies highlight its productivity and yield.
• Lubin stresses that ETH is high‑powered, uncensorable money. In an August 2025 interview he said SharpLink’s goal is to build the largest trusted ETH treasury and keep accumulating ETH, with one million ETH merely a near‑term signpost. He calls Ethereum the base layer for global finance, citing that it settled over US $25 trillion in transactions in 2024 and hosts most real‑world assets and stablecoins.

Competitive landscape and regulation​

• Lubin welcomes new entrants into the ETH treasury race because they amplify Ethereum’s credibility; however, he believes SharpLink holds an advantage due to its ETH‑native team, staking know‑how and institutional credibility. He predicts ETFs will eventually be allowed to stake, but until then treasury companies like SharpLink can fully stake ETH and earn yield.
• In a CryptoSlate interview he noted that the supply–demand imbalance for ETH and daily purchases by treasuries will accelerate adoption. He emphasised that decentralisation is the direction of travel and expects both ETH and BTC to continue rising as the world becomes more decentralised.

SharpLink’s execution​

• SharpLink quietly shifted its focus from sports betting technology to Ethereum in early 2025. According to shareholder filings, it converted significant portions of its liquid reserves into ETH—176 270 ETH for $462.9 million in July 2025 and another 77 210 ETH for $295 million a day later. An August 2025 direct offering raised $400 million and a $200 million at‑the‑market facility, pushing SharpLink’s reserves beyond 598 800 ETH.
• Lubin says SharpLink accumulates tens of millions of dollars in ETH daily and stakes it via DeFi to generate yield. Standard Chartered analysts have noted that ETH treasuries like SharpLink remain undervalued relative to their holdings.

Sam Tabar – CEO of Bit Digital​

Rationale for pivoting to Ethereum​

• After profitably running a Bitcoin mining and AI infrastructure business, Sam Tabar led Bit Digital’s complete pivot into an Ethereum treasury and staking company. He sees Ethereum’s programmable smart‑contract platform, growing adoption and staking yields as capable of rewriting the financial system. Tabar asserts that if BTC and ETH had launched simultaneously, Bitcoin might not exist because Ethereum enables trustless value exchange and complex financial primitives.
• Bit Digital sold 280 BTC and raised around $172 million to purchase over 100 k ETH. Tabar has emphasised that Ethereum is no longer a side asset but the centerpiece of Bit Digital’s balance sheet and that the firm intends to continue acquiring ETH to become the leading corporate holder. The company announced a direct offering of 22 million shares priced at $3.06 to raise $67.3 million for further ETH purchases.

Financing strategy and risk management​

• Tabar is a strong proponent of using unsecured convertible debt rather than secured loans. He warns that secured debt could “destroy” ETH treasury companies in a bear market because creditors might seize the tokens when prices fall. By issuing unsecured convertible notes, Bit Digital retains flexibility and avoids encumbering its assets.
• In a Bankless interview he compared the ETH treasury race to Michael Saylor’s Bitcoin playbook but noted that Bit Digital is a real business with cash flows from AI infrastructure and mining; it aims to leverage those profits to grow its ETH holdings. He described competition among ETH treasuries as friendly but emphasised that mindshare is limited—companies must aggressively accumulate ETH to attract investors, yet more treasuries ultimately benefit Ethereum by raising its price and awareness.

Vision for the future​

Tabar envisions a world where Ethereum replaces much of the existing financial infrastructure. He believes regulatory clarity (e.g., the GENIUS Act) has unlocked the path for companies like Bit Digital to build compliant ETH treasuries and sees the staking yield and programmability of ETH as core drivers of future value. He also highlights that DATs open the door for public‑market investors who cannot buy crypto directly, democratizing access to the Ethereum ecosystem.

Cosmo Jiang – General Partner at Pantera Capital​

Investment thesis: DATs as on‑chain banks​

• Cosmo Jiang views DATs as sophisticated financial institutions that operate more like banks than passive token holders. In an Index Podcast summary he explained that DATs are evaluated like banks: if they generate a return above their cost of capital, they trade above book value. According to Jiang, investors should focus on NAV‑per‑share growth—analogous to free cash‑flow per share—rather than token price, because execution and capital allocation drive returns.
• Jiang argues that DATs can generate yield by staking and lending, increasing asset value per share and producing more tokens than simply holding spot. One determinant of success is the long‑term strength of the underlying token; this is why Pantera’s Solana Company (HSDT) uses Solana as its treasury reserve. He contends that Solana offers fast settlement, ultra‑low fees and a monolithic design that is faster, cheaper and more accessible—echoing Jeff Bezos’s “holy trinity” of consumer wants.
• Jiang also notes that DATs effectively lock up supply because they operate like closed‑end funds; once tokens are acquired, they rarely sell, reducing liquid supply and potentially supporting prices. He sees DATs as a bridge that brings tens of billions of dollars from traditional investors who prefer equities over direct crypto exposure.

Building the pre‑eminent Solana treasury​

• Pantera has been a pioneer in DATs, anchoring early launches such as DeFi Development Corp (DFDV) and Cantor Equity Partners (CEP) and investing in BitMine. Jiang writes that they have reviewed over fifty DAT pitches and that their early success has positioned Pantera as a first call for new projects.
• In September 2025 Pantera announced Solana Company (HSDT) with more than $500 million in funding, designed to maximize SOL per share and provide public‑market exposure to Solana. Jiang’s DAT thesis states that owning a DAT could offer higher return potential than holding tokens directly or via an ETF because DATs grow NAV per share through yield generation. The fund aims to scale institutional access to Solana and leverage Pantera’s track record to build the pre‑eminent Solana treasury.
• He emphasises that the timing is critical: digital asset equities have enjoyed a tailwind as investors search for crypto exposure beyond ETFs. However, he warns that excitement will invite competition; some DATs will succeed while others fail. Pantera’s strategy is to back high‑quality teams, filter for incentive‑aligned management and support consolidation (M&A or buybacks) in downside scenarios.

Conclusion​

Collectively, these leaders see digital asset treasuries as a bridge between traditional finance and the emerging token economy. Tom Lee envisions ETH treasuries as vehicles to capture the AI–crypto super‑cycle and aims to accumulate 5 % of Ethereum’s supply; he stresses velocity, yield and liquidity as key drivers of NAV premiums. Joseph Lubin views ETH treasuries as yield‑generating machines that tell the Ethereum story to Wall Street while pushing DeFi and staking into mainstream finance. Sam Tabar is betting that Ethereum’s programmability and staking yields will rewrite financial infrastructure and warns against secured debt, promoting aggressive yet prudent accumulation through unsecured financing. Cosmo Jiang frames DATs as on‑chain banks whose success depends on capital allocation and NAV‑per‑share growth; he is building the pre‑eminent Solana treasury to showcase how DATs can unlock new growth cycles. All four anticipate that DATs will continue to proliferate and that public‑market investors will increasingly choose them as vehicles for exposure to crypto’s next chapter.

BlackRock’s iShares Bitcoin Trust, ticker IBIT, has become one of the most popular ways for investors to gain exposure to Bitcoin directly from a standard brokerage account. But what is it, how does it work, and what are the trade-offs?

In short, IBIT is an exchange-traded product (ETP) that holds actual Bitcoin and trades like a stock on the NASDAQ exchange. Investors use it for its convenience, deep liquidity, and access within a regulated market. As of early September 2025, the fund holds approximately $82.6 billion in assets, charges a 0.25% expense ratio, and uses Coinbase Custody Trust as its custodian. This guide breaks down exactly what you need to know.

What You Actually Own with IBIT​

When you buy a share of IBIT, you are buying a share of a commodity trust that holds Bitcoin. This structure is more like a gold trust than a traditional mutual fund or ETF governed by the 1940 Act.

The fund’s value is benchmarked against the CME CF Bitcoin Reference Rate – New York Variant (BRRNY), a once-a-day reference price used to calculate its Net Asset Value (NAV).

The actual Bitcoin is stored with Coinbase Custody Trust Company, LLC, with operational trading handled through Coinbase Prime. The vast majority of the Bitcoin sits in segregated cold storage, referred to as the “Vault Balance.” A smaller portion is kept in a “Trading Balance” to manage the creation and redemption of shares and to pay the fund’s fees.

The Headline Numbers That Matter​

• Expense Ratio: The sponsor fee for IBIT is 0.25%. Any introductory fee waivers have since expired, so this is the current annual cost.
• Size & Liquidity: With net assets of $82.6 billion as of September 2, 2025, IBIT is a giant in the space. It sees tens of millions of shares traded daily, and its 30-day median bid/ask spread is a tight 0.02%, which helps minimize slippage for traders.
• Where It Trades: You can find the fund on the NASDAQ exchange under the ticker symbol IBIT.

How IBIT Keeps Up with Bitcoin’s Price​

The fund’s share price stays close to the value of its underlying Bitcoin through a creation and redemption mechanism involving Authorized Participants (APs), which are large financial institutions.

Unlike many gold ETPs that allow for “in-kind” transfers (where APs can swap a block of shares for actual gold), IBIT was launched with a “cash” creation/redemption model. This means APs deliver cash to the trust, which then buys Bitcoin, or they receive cash after the trust sells Bitcoin.

In practice, this process has been very effective. Thanks to the heavy trading volume and active APs, the premium or discount to the fund’s NAV has generally been minimal. However, these can widen during periods of high volatility or if the creation/redemption process is constrained, so it’s always wise to check the fund’s premium/discount stats before trading.

What IBIT Costs You (Beyond the Headline Fee)​

Beyond the 0.25% expense ratio, there are other costs to consider.

First, the sponsor fee is paid by the trust selling small amounts of its Bitcoin holdings. This means that over time, each share of IBIT will represent a slightly smaller amount of Bitcoin. If Bitcoin’s price rises, this effect can be masked; if not, your share’s value will gradually drift downward compared to holding raw BTC.

Second, you’ll encounter real-world trading costs, including the bid/ask spread, any brokerage commissions, and the potential for trading at a premium or discount to NAV. Using limit orders is a good way to maintain control over your execution price.

Finally, trading shares of IBIT involves securities, not the direct holding of cryptocurrency. This simplifies tax reporting with standard brokerage forms but comes with different tax nuances than holding coins directly. It’s important to read the prospectus and consult a tax professional if needed.

IBIT vs. Holding Bitcoin Yourself​

Choosing between IBIT and self-custody comes down to your goals.

• Convenience & Compliance: IBIT offers easy access through a brokerage account, with no need to manage private keys, sign up for crypto exchanges, or handle unfamiliar wallet software. You get standard tax statements and a familiar trading interface.
• Counterparty Trade-offs: With IBIT, you don't control the coins on-chain. You are relying on the trust and its service providers, including the custodian (Coinbase) and prime broker. It’s crucial to understand these operational and custody risks by reviewing the fund’s filings.
• Utility: If you want to use Bitcoin for on-chain activities like payments, Lightning Network transactions, or multi-signature security setups, self-custody is the only option. If your goal is simply price exposure in a retirement or taxable brokerage account, IBIT is purpose-built for that.

IBIT vs. Bitcoin Futures ETFs​

It’s also important to distinguish spot ETFs from futures-based ones. A futures ETF holds CME futures contracts, not actual Bitcoin. IBIT, as a spot ETF, holds the underlying BTC directly.

This structural difference matters. Futures funds can experience price drift from their underlying asset due to contract roll costs and the futures term structure. Spot funds, on the other hand, tend to track the spot price of Bitcoin more tightly, minus fees. For straightforward Bitcoin exposure in a brokerage account, a spot product like IBIT is generally the simpler instrument.

How to Buy—And What to Check First​

You can buy IBIT in any standard taxable or retirement brokerage account under the ticker IBIT. For best execution, liquidity is typically highest near the U.S. stock market's open and close. Always check the bid/ask spread and use limit orders to control your price.

Given Bitcoin’s volatility, many investors treat it as a satellite position in their portfolio—an allocation small enough that they can tolerate a significant drawdown. Always read the risk section of the prospectus before investing.

Advanced Note: Options Exist​

For more sophisticated investors, listed options on IBIT are available. Trading began on venues like the Nasdaq ISE in late 2024, enabling hedging or income-generating strategies. Check with your broker about eligibility and the associated risks.

Risks Worth Reading Twice​

• Market Risk: Bitcoin’s price is notoriously volatile and can swing sharply in either direction.
• Operational Risk: A security breach, key-management failure, or other problem at the custodian or prime broker could negatively impact the trust. The prospectus details the risks associated with both the "Trading Balance" and the "Vault Balance."
• Premium/Discount Risk: If the arbitrage mechanism becomes impaired for any reason, IBIT shares can deviate significantly from their NAV.
• Regulatory Risk: The rules governing cryptocurrencies and related financial products are still evolving.

A Quick Checklist Before You Click “Buy”​

Before investing, ask yourself these questions:

• Do I understand that the sponsor fee is paid by selling Bitcoin, which slowly reduces the amount of BTC per share?
• Have I checked today’s bid/ask spread, recent trading volumes, and any premium or discount to NAV?
• Is my investment time horizon long enough to withstand crypto’s inherent volatility?
• Have I made a conscious choice between spot exposure via IBIT and self-custody based on my specific goals?
• Have I read the latest fund fact sheet or prospectus? It remains the single best source for how the trust truly operates.

This post is for educational purposes only and is not financial or tax advice. Always read official fund documents and consider professional guidance for your situation.

BlockEden.xyz is excited to announce the launch of our CryptoNews API, empowering developers with real-time access to comprehensive cryptocurrency news and market sentiment data. This new addition to our API marketplace reflects our commitment to providing developers with the tools they need to build sophisticated, data-driven applications in the Web3 space.

Why CryptoNews API?​

In today's fast-paced crypto market, having access to real-time news and sentiment analysis isn't just a nice-to-have—it's essential. Whether you're building a trading platform, market analytics dashboard, or consumer crypto app, integrating reliable news data can significantly enhance your user experience and provide valuable market context.

Key Features​

• Real-time News Updates: Access a continuous stream of crypto news from trusted sources
• Sentiment Analysis: Get pre-processed sentiment scores for each news article
• Topic Classification: Filter news by specific topics like "mining," "pricemovement," etc.
• Asset Tracking: Track news by specific cryptocurrency tickers (BTC, ETH, etc.)
• Rich Metadata: Each article includes source information, publication date, images, and more
• GraphQL Interface: Flexible querying with our intuitive GraphQL API

Getting Started​

Getting started with CryptoNews API is straightforward. Here's a simple example using GraphQL:

query CryptoNews($after: String, $first: Int) {
  cryptoNews(after: $after, first: $first) {
    pageInfo {
      hasNextPage
      endCursor
      hasPreviousPage
      startCursor
    }
    edges {
      node {
        title
        text
        sentiment
        tickers
        topics
        sourceName
        newsUrl
      }
    }
  }
}

Visit https://blockeden.xyz/api-marketplace/crypto-news to get your API key and start building.

Use Cases​

• Trading Applications: Integrate real-time news feeds to help traders make informed decisions
• Market Analysis Tools: Build comprehensive market intelligence platforms
• Portfolio Trackers: Enhance portfolio tracking with relevant news for held assets
• Content Aggregators: Create crypto news aggregation services
• Sentiment Analysis: Develop market sentiment indicators based on news data

Simple Integration, Powerful Results​

Our CryptoNews API is designed to be developer-friendly while delivering enterprise-grade reliability. With flexible pagination, rich filtering options, and comprehensive documentation, you can start pulling crypto news data into your application in minutes.

const response = await fetch('https://api.blockeden.xyz/crypto-news/<access_key>', {
  method: 'POST',
  headers: {
    'Content-Type': 'application/json',
  },
  body: JSON.stringify({
    query: `
      query CryptoNews {
        cryptoNews(first: 10) {
          edges {
            node {
              title
              sentiment
              tickers
            }
          }
        }
      }
    `
  }),
});

Pricing and Access​

We offer flexible pricing tiers to accommodate projects of all sizes:

• Free Tier: Perfect for testing and development
• Growth: For scaling applications
• Enterprise: Custom solutions for high-volume needs

Get Started Today​

Ready to enhance your application with real-time crypto news? Visit https://blockeden.xyz/api-marketplace/crypto-news to get started, or join our Discord community for support and discussions.

Stay connected with BlockEden.xyz:

• Twitter: https://twitter.com/BlockEdenHQ
• Discord: https://discord.gg/eWZvE4RSBw

Build the future of crypto with BlockEden.xyz! 🚀