"Price Volatility" and "Financial Infrastructure": Cryptocurrency Enters the Second Half of Institutionalization

For the past decade or so, cryptocurrencies have been perceived by most people as nothing more than volatile digital assets. How much Bitcoin rose today, whether a certain token doubled in value, whether exchanges experienced liquidations—this seemed to be the entirety of the industry.

(Image caption) From cryptocurrency price fluctuations to financial infrastructure

But this understanding is outdated today.
Cryptocurrencies are undergoing a profound identity transformation. They are no longer merely a speculative market, nor simply a fringe experiment within the tech community; they are beginning to address more fundamental issues within the financial world.
How are assets issued? How is their value settled? How do funds flow across borders? How are profits distributed? How is ownership registered? How does regulation intervene? And how are real-world assets brought into the programmable financial network?
In other words, the first half of the cryptocurrency era was a narrative of "asset digitization"; the second half is a practice of "financial system digitization".
As of this writing, the global cryptocurrency market capitalization is approximately $2.68 trillion, with a 24-hour trading volume of about $76.3 billion, and more than 17,500 crypto assets are tracked. Among them, Bitcoin accounts for about 58.2% of the market capitalization, and Ethereum accounts for about 10.5%. These figures themselves demonstrate that crypto assets are no longer a fringe experiment, but a new type of asset market with global liquidity, cross-border participants, and institutional attention.
But what's truly noteworthy isn't the size of the market capitalization, but rather the changing structure of this market.
In its early days, Bitcoin was at the heart of the crypto market, representing scarcity and decentralization. Later, Ethereum propelled cryptocurrencies from "digital gold" to "programmable finance." Still later, stablecoins became the on-chain dollar, and DeFi became the testing ground for open finance. And today, RWA (Real World Assets) is bringing US Treasury bonds, money market funds, private credit, gold, real estate, equities, and fund shares onto the blockchain.
This marks the second half of the institutionalization of cryptocurrencies.
Its main focus is no longer just the price of the coin—but the financial infrastructure itself.

(Image caption) Bitcoin's transformation from a rebellious asset to an institutional asset

Bitcoin: From Rebel Asset to Institutional Asset. Bitcoin remains the anchor of the crypto world.
Its significance lies not in daily price fluctuations, but in the creation of a scarce asset based on global consensus—not relying on a single company, a single country, or the credit backing of traditional financial institutions, but only on open-source programs, network nodes, computing power security, and market consensus to maintain its operation.
This is why Bitcoin was initially seen as a "rebellious asset": it was born out of distrust of the centralized financial system and has long been regarded by traditional finance as an outlier that is difficult to understand, value, and regulate.
2024 is a pivotal year.
That year, the U.S. Securities and Exchange Commission (SEC) approved the listing of several spot Bitcoin exchange-traded products (ETPs). The SEC explicitly stated that this approval was limited to ETPs holding Bitcoin, a "non-security asset," and did not represent an endorsement of the legal status of other crypto assets—this statement is crucial, as it defines the boundaries and opens a door.
The real significance of spot ETFs is to transform "Bitcoin in your wallet" into "Bitcoin exposure in your financial account".
For institutional investors, directly holding Bitcoin involves issues of private key management, exchange risks, custody compliance, and internal controls; ETFs, on the other hand, transform these issues into product forms familiar to traditional finance. Bitcoin is thus being reinterpreted by traditional finance: it is no longer just a symbol of cypherpunks, but is gradually becoming an option in macro asset allocation—entering the discussion framework of wealth management, family offices, and institutional portfolios.
Subsequently, the spot Ethereum ETF also made key progress. In May 2024, the SEC approved the Ethereum spot ETF applications from exchanges such as Nasdaq, CBOE, and NYSE, paving the way for the listing of related products.
This signifies the institutionalization of the crypto market, moving beyond Bitcoin as a single asset and extending into a broader on-chain financial ecosystem.
The emergence of Bitcoin ETFs does not mean that Bitcoin has lost its rebellious nature. On the contrary, it illustrates something more important: when the size, liquidity, and market demand of a decentralized asset are large enough, institutions will no longer simply exclude it, but will try to incorporate it into a manageable, discloseable, tradable, and configurable financial framework.
This is the first sign of the second half of the cryptocurrency era: assets may originate from decentralization, but will ultimately be repackaged, repriced, and redistributed by institutionalized finance.

Stablecoins: On-chain USD as a new financial water pipe. If Bitcoin is the "gold" of the crypto world, stablecoins are more like the "cash" and "settlement layer" of the crypto world.
In practical use, stablecoins are closer to financial infrastructure than most volatile crypto assets. Traders use them for hedging and settlement, cross-border remittance users use them to transfer value, DeFi protocols use them as collateral and liquidity, and RWA products use them to complete subscriptions, redemptions, and profit distribution.
According to DefiLlama data, the total market capitalization of global stablecoins is approximately US$320.675 billion, of which USDT accounts for approximately 59.18%.
This is no longer just a pricing unit, but a financial pipeline that spans centralized exchanges, decentralized finance, public blockchain ecosystems, cross-border payments, RWA settlement, and institutional fund management.
The appeal of stablecoins lies in their combination of the stability of US dollar assets with the speed, programmability, and global accessibility of blockchain: 24/7 liquidity, cross-border transfers, embedded smart contracts, and serving as the base currency for on-chain transactions and yield payments. This is why stablecoins are playing an increasingly irreplaceable role in emerging markets, cross-border payments, digital banking, Web3 commerce, and RWA scenarios.
However, the more important stablecoins become, the more acute the regulatory issues become.
In a speech in April 2026, the Bank for International Settlements (BIS) pointed out that stablecoins have the potential to be integrated with smart contracts and improve the speed of cross-border payments, but at the same time they also raise fundamental questions such as how currencies should evolve in the digital age, how private currencies should be regulated, and how cross-border payments should be governed.
Stablecoins are not simply "faster money." They represent a new network for currency distribution and clearing. The larger this network becomes, the more crucial questions need to be addressed: Are the reserve assets transparent? Can funds be redeemed at any time? Do they comply with anti-money laundering and sanctions regulations? Who regulates their circulation across jurisdictions? And who bears the risk in the event of a run on the bank?

(Image caption) Stablecoins become on-chain dollar pipelines

Major financial regulatory regions are providing their own answers:
United States: The GENIUS Act was signed into law in 2025, establishing a federal regulatory framework for payments of stablecoins, requiring issuers to meet arrangements such as reserves, disclosure, consumer protection, anti-money laundering, and sanctions compliance; the Treasury Department, FinCEN, and OFAC also proposed supplementary rules in April 2026 to implement the relevant compliance requirements.
The European Union: The MiCA framework will be applied in phases starting in 2024, initially bringing asset reference tokens and electronic currency tokens under regulation, and further promoting the implementation of regulation for crypto asset service providers by the end of 2024.
Hong Kong: Fiat-backed stablecoin issuance under the Stablecoin Ordinance became a regulated activity on August 1, 2025. In April 2026, the Hong Kong Monetary Authority granted stablecoin issuer licenses to two institutions, marking the formal implementation of stablecoin regulation in Hong Kong.
These changes indicate that the second half of the stablecoin competition is no longer just about who issues the fastest or has the largest circulation volume—but rather who can establish a credible system in terms of reserve transparency, redemption mechanisms, cross-border compliance, payment scenarios, and regulatory frameworks.
The true sign of a stablecoin's maturity is not its market capitalization exceeding billions, but rather that ordinary people and institutions can confidently use it as a regulated, traceable, and redeemable payment and settlement tool.

DeFi: From a High-Yield Experimentation Ground to an On-Chain Financial Operating System
DeFi was once the most radical experimental frontier in the crypto market.
Decentralized exchanges, automated market makers, lending protocols, liquidity mining, synthetic assets, perpetual contracts, cross-chain bridges—since 2020, DeFi has truly brought the idea that "finance can exist without relying on traditional intermediaries" to the global market.
However, early DeFi also had obvious structural flaws: high leverage and high returns came with high risks, and high complexity came with high vulnerabilities. Many protocols appeared to be financial innovations, but in reality, they were highly dependent on token incentives and market bubbles—once liquidity contracted or smart contracts were attacked, the risks would be quickly exposed.
The focus is shifting in the second half of DeFi.
In the past, the core issue of DeFi was "how to create higher returns"; now, the issue is becoming "how to integrate real assets, stablecoins, compliant liquidity, and institutional-grade risk management".
DeFi is evolving from a high-risk, high-reward game into an on-chain financial operating system.
This operating system includes several key capability layers:
• Transparent accounting: All transactions, collateral, liquidation, and fund flows can be tracked and verified on the blockchain.
• Automatic execution: Smart contracts complete staking, liquidation, profit sharing, redemption and asset transfer according to predetermined conditions without human intervention.
• Global accessibility: As long as the rules and identity requirements are met, investors, institutions, and project owners can access the same financial network across geographical boundaries.
• Composable: Stablecoins, RWA, lending protocols, trading protocols, insurance protocols, and payment instruments can be recombined like building blocks to construct more complex financial logic.
However, institutionalization does not mean the disappearance of risks.
Smart contract vulnerabilities, oracle failures, cross-chain bridge attacks, liquidity runs, collateral discounting, protocol governance failures, and regulatory arbitrage—these risks will actually be subject to more rigorous scrutiny during the institutionalization phase. The future of DeFi is neither complete deregulation nor a simple return to traditional finance, but rather finding a new balance between transparency, automation, programmability, and compliant governance.
If stablecoins are like on-chain dollar pipes, then DeFi is like an on-chain financial robotic arm—automating the flow of funds, asset collateralization, yield distribution, and risk management.
RWA is the key entry point for DeFi to enter the second half of its institutionalization.

(Image caption) DeFi shifts to on-chain financial operating systems

RWA: Real Assets on Blockchain, Financial Market Reshuffling
RWA represents the most institutionally robust direction in the current crypto industry.
RWA is not simply about "making a token out of an asset," but rather about completely connecting real-world asset rights, income rights, holder identities, legal documents, custody arrangements, auditing processes, and on-chain circulation mechanisms. This is a far more complex systems engineering project than simply "issuing a token."
According to data from RWA.xyz, the current on-chain RWA assets are worth approximately $26.71 billion, representing an asset value of approximately $345.07 billion, with approximately 698,200 holders; the number of stablecoin holders has exceeded 241 million.
These figures demonstrate that RWA is not merely a conceptual game, but rather an emerging market that is forming with real funds, real assets, real issuers, real holders, and real regulatory responsibility.
Currently, the leading RWA funds in terms of scale are mainly US Treasury bonds and money market funds. The reasons are straightforward: high degree of standardization, clear sources of returns, strong transparency of underlying assets, and easier integration with custody, auditing, fund units, and accredited investor frameworks.
BlackRock's BUIDL (BlackRock USD Institutional Digital Liquidity Fund) is a significant example. With total assets of approximately $2.503 billion, its investment objective is to seek current returns while maintaining liquidity and principal stability; its asset class is related to U.S. Treasury bonds.
Franklin Templeton's Franklin OnChain US Government Money Fund (BENJI) is another example. The fund invests in US government securities, cash, and repurchase agreements fully secured by government securities or cash, and as of March 31, 2026, the fund had total net assets of approximately $844 million.
The significance of these two cases lies in the fact that RWA is no longer just a self-narrative of the crypto-native team—traditional asset management giants are personally getting involved, connecting funds, government bonds, money market instruments, and on-chain distribution mechanisms.
The deeper meaning of RWA is to give financial assets a new way of expression.
In traditional finance, assets reside in brokerage accounts, fund registration systems, bank custody systems, and clearing and settlement networks—limited by trading hours, intermediary layers, settlement cycles, geographical barriers, and high entry barriers. Under the RWA model, compliant assets have the opportunity to acquire several new characteristics:
• 24/7 circulation • More granular splitting • Integration with smart contracts for automated execution • Subscription and redemption using stablecoins • On-chain staking, liquidation, profit distribution, and audit trail • Redesigned distribution methods across multiple jurisdictions However, this does not mean that all assets should be on-chain, nor does it mean that being on-chain is inherently safer.
The most critical questions surrounding RWA are precisely: Do the on-chain tokens truly correspond to off-chain legal rights? Do the underlying assets actually exist and are properly held in custody? Who is responsible for valuation? Who is responsible for auditing? Who can investors seek redress from if problems arise? Is the transfer of tokens legal? How are the rights to proceeds and ownership recognized at the court level?
Therefore, for GFM's "Web4 × RWA" column, the most worthwhile aspect of RWA to explore is not the superficial action of "turning assets into tokens," but rather five more fundamental questions:
Who possesses tangible assets? Who has compliance capabilities? Who has custody and auditing capabilities? Who can build investor trust? Who can truly bridge the gap between on-chain efficiency and offline legal rights?
The future RWA market will not be just a market for technology companies or financial institutions, but a new financial ecosystem in which asset owners, custodians, auditors, lawyers, fund managers, trading platforms, payment companies, public blockchain infrastructure, and regulatory agencies all participate.

(Image caption) RWA promotes the on-chaining of real assets.

Tokenized Funds: Traditional Asset Management Enters the Era of On-Chain Distribution. Among RWA's many asset classes, tokenized funds are a particularly noteworthy area.
Compared to non-standard assets such as real estate, art, and private equity, funds are closer to standardized financial instruments: they have clearly defined managers, underlying assets, valuation rules, share registration, redemption mechanisms, investor suitability requirements, and regulatory frameworks. This makes them more likely to become the first batch of experimental products for traditional finance to enter the on-chain world.
The essence of tokenized funds is not to "package" funds as coins for speculation, but to redesign the registration, transfer, subscription, redemption and collateralization of fund units.
In the future, fund units may no longer be just an account record in the fund company or securities firm system, but become a verifiable, custodial, collateralizable, and transferable on-chain certificate in a compliant network.
This has several profound implications for the asset management industry:
Distribution is more global. As long as it complies with local regulations, investor identity, and compliance requirements, fund products can reach more markets through blockchain networks, breaking down geographical barriers in traditional distribution channels.
Liquidity management becomes more immediate. Traditional fund subscriptions and redemptions are constrained by trading days, deadlines, and settlement cycles. Tokenized funds have the opportunity to significantly improve settlement efficiency while remaining compliant with regulations.
Shares can be used as collateral. On-chain shares of money market funds or government bond funds may be used as collateral in exchanges, lending protocols, payment networks, or institutional clearing in the future, significantly improving capital efficiency.
Auditing and information disclosure are more transparent. On-chain records cannot replace auditing, but they can improve the traceability of asset flows, share changes, and holder structure, providing a more real-time data foundation for regulation.
This is the imagination behind tokenized funds: they are not meant to eliminate traditional asset management, but to connect traditional asset management to a more immediate, programmable, and global financial network.
When traditional asset management giants such as BlackRock and Franklin Templeton begin to enter this market themselves, RWA is no longer just a self-narrative within the Web3 community, but rather part of the traditional financial sector's proactive infrastructure upgrade—an institutional restructuring from the inside out.

On-chain payments: From cross-border transfers to programmable commerce. If the early idea of crypto payments was "buying coffee with Bitcoin," today's on-chain payments are completely different.
The truly promising scenarios today are cross-border enterprise payments, global supply chain settlements, platform economy revenue sharing, creator income distribution, stablecoin remittances, digital banking, B2B clearing, and automated distribution of RWA asset yields.
In traditional cross-border payments, funds often need to traverse multiple intermediary banks, clearing networks, foreign exchange conversions, and compliance reviews, resulting in high costs, long processing times, and insufficient transparency. Stablecoins and on-chain payments offer not a replacement, but another possibility: value can flow faster across the global network like information, and every transaction can be tracked, verified, and programmed.
This is especially important for RWA.
If a tokenized fund wants to distribute returns to accredited investors globally, it needs a cross-border, traceable, and automatically executed payment instrument—stablecoins and on-chain payments are perfectly suited for this. If an on-chain government bond product needs to complete subscription and redemption, it needs a settlement currency that matches the on-chain assets—stablecoins are the most direct candidate. If a company wants to tokenize accounts receivable, supply chain finance, or trade assets, on-chain payments allow funds, invoices, contracts, asset rights, and repayment processes to operate within the same programmable framework.
The significance of on-chain payments is not as simple as "moving money onto the chain," but rather that business processes, contract terms, asset rights, and fund flows can be integrated into the same digital system.
This is one of the core ideas of Web4 finance: payment is no longer just an action of making a payment, but an integrated interface of assets, identity, contracts, risk control and settlement.

(Image caption) Tokenized funds reshape asset management and distribution

Institutionalization: Cryptocurrencies are no longer priced solely on sentiment. The deepest structural problems in the crypto industry in the past have been: having technology but lacking institutions; having users but lacking protection; having liquidity but lacking boundaries; having innovation but lacking responsibility.
In early-stage markets, narrative, community, leverage, and liquidity often take precedence over fundamentals. A token can skyrocket in value because of a single sentence, or plummet to zero in an instant due to a hack, regulatory announcement, or exchange crisis.
However, institutionalized markets cannot remain in this state forever.
ETFs, stablecoin regulation, RWA, tokenized funds, custody systems, anti-money laundering rules, on-chain compliance tools, auditing mechanisms, and investor suitability arrangements are collectively guiding crypto assets from "wild growth" to "institutional growth."
Institutionalization will lead to two inseparable results.
First, more institutional funds are willing to enter the market. This is because the product structure, custody arrangements, risk disclosure, legal status, and regulatory boundaries are clearer, allowing institutions to make investment decisions within a compliant framework.
Second, the industry must meet higher standards. Once it enters mainstream finance, "risk-averse" can no longer be the answer to all problems. The market needs to protect ordinary investors, identify money laundering and fraud, prevent market manipulation, and establish bankruptcy remoteness, asset trusteeship, information disclosure, and internal control mechanisms.
This is the core paradox of the institutionalization of cryptocurrencies: on the one hand, it increases market credibility, but on the other hand, it shrinks the boundless freedom of the early crypto world.
But this is not a bad thing.
Any financial infrastructure that is to serve hundreds of millions of people and trillions of dollars in assets must be subject to regulation, law, auditing, risk control, and accountability.
Institutionalization is not the end of the crypto spirit, but rather the beginning of the crypto market entering a mature stage.

Risk: True warmth comes from protecting ordinary people. The crypto industry has both light and shadow.
It has brought about financial openness, cross-border efficiency, programmable assets, transparent accounting, and new ways of capital formation; but it has also been accompanied by fraud, money laundering, hacking, sanctions circumvention, Ponzi schemes, market manipulation, and losses for retail investors.
TRM Labs' 2026 Crypto Crime Report indicates that illicit crypto money flows reached $158 billion in 2025, a significant increase from 2024; however, the proportion of illicit activity in total on-chain transactions decreased from 1.3% in 2024 to 1.2% in 2025.
This set of data is worth reading carefully.
While the absolute scale of illicit financial flows is rising, legitimate use of cryptocurrencies across the market is also expanding in tandem. Cryptocurrencies are not simply tools for crime, but they have certainly become a conduit for global financial crime, sanctions evasion, and gray market flows.
Chainalysis also points out that stablecoins accounted for 84% of illicit crypto transactions in 2025. This doesn't mean stablecoins themselves are problematic, but rather that they possess characteristics needed by both legitimate and illicit users: easy cross-border transfers, low volatility, high liquidity, and wide applicability. The more useful a technology is, the more it will be used by all kinds of people. Therefore, the real question is never whether or not to use technology, but how to integrate technology into trusted governance.
A mature crypto market cannot simply celebrate capital efficiency; it must also recognize the real harm suffered by ordinary people: elderly people lured by fraudulent platforms, retail investors attracted by high-yield stories, novices whose assets are stolen by phishing websites, platform users attacked by hackers, and cross-border payment channels exploited by money laundering networks.
The true value of fintech lies not in how fast it can move money, but in whether it can minimize the harm to the most vulnerable.
Therefore, the ultimate goal of institutionalizing cryptocurrencies is not only to make it easier for institutions to allocate assets, but also to provide ordinary users with more protection, clearer information, and more reliable recourse mechanisms when facing an increasingly complex financial network.

(Image caption) Web4 x RWA connects to a new financial network

Web4 × RWA: The Next Layer of the Financial Internet. If Web1 is information reading, Web2 is platform interaction, and Web3 is value on-chaining, then Web4 is closer to a new stage of deep integration—real assets, compliant identities, smart contracts, payment networks, AI decision-making, regulatory interfaces, and global capital markets are beginning to converge on the same set of digital infrastructure.
In this sense, RWA is not an appendage of Web3, but a core gateway to Web4 finance.
Only when real-world assets can be reliably mapped onto the blockchain can on-chain finance transcend the self-perpetuating nature of the crypto world. Only when identity, compliance, custody, auditing, legal rights, and payment settlement can RWA truly move from concept to industry.
The future financial market may undergo several profound changes:
Asset issuance methods will change. Corporate, fund, government debt, private credit, and alternative assets will be issued and registered more efficiently through compliant blockchain networks.
The way assets flow will change. Traditional markets are constrained by transaction time, settlement cycles, and intermediary levels, while on-chain assets can technically support more immediate, transparent, and global circulation.
Payment and settlement methods will change. Stablecoins, central bank digital currencies, tokenized deposits, and on-chain payment networks will jointly drive a profound restructuring of cross-border payment and financial settlement systems.
Investor relations will change. Holders will no longer be just names in an account system, but may become verifiable, interactive, and tiered authorized participants in the asset ecosystem on the blockchain.
The regulatory approach will also change. Future regulation will not only rely on ex-post reporting, but will also gradually introduce on-chain monitoring, real-time risk identification, smart contract auditing, and compliance whitelist mechanisms.
This is the true vision of Web4 × RWA: not wrapping finance in blockchain, but reorganizing finance with a new generation of networks.

The future of cryptocurrencies is not about replacing finance, but about reconstructing finance. Cryptocurrencies are no longer just "coins".
It is evolving into a new financial language.
Bitcoin represents scarcity; Ethereum represents programmable finance; stablecoins represent on-chain cash; DeFi represents automated financial logic; RWA represents the digital rights to real-world assets; tokenized funds represent on-chain distribution of traditional asset management; on-chain payments represent a new path for cross-border value flows; and the regulatory framework represents how all of this enters the institutionalized market.
The most valuable opportunities in the future lie not in chasing every price fluctuation, but in understanding a larger trend:
Finance is shifting from "institutional accounting" to "networked accounting"; from "time-limited" to "24/7"; from "closed accounts" to "programmable assets"; from "single market" to "global interconnection"; and from "virtual narratives" to "real assets".
But the more ambitious the technology, the more humble the system needs to be.
The day when cryptocurrencies truly mature will not be the day their price reaches its highest point, but the day when ordinary people can use them safely, institutions can participate in compliance with regulations, regulators can effectively govern them, and real assets can circulate reliably.
That day is coming.
What GFM's "Web4 × RWA" column aims to record is this global shift from "currency price volatility" to "financial infrastructure"—a long and profound institutional process that begins here.

This article is the global edition of GFM's "Web4 × RWA" column. The data cited in this article is current as of the time of writing; some market data is outdated, so please refer to the latest information. This article does not constitute any investment advice.