The traditional four-year cryptocycle seems to be broken due to the introduction of institutional investment by stock market funds, real-world asset tokenization, and market conditions for stablecoin infrastructure redesigns. This shift has been driven by the growing adoption of Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs), which have attracted significant investment from institutional investors.
Attractive for TradFi
The introduction of Bitcoin and Ethereum ETFs has marked a significant turning point in the cryptocurrency market, with institutional investors such as pension funds, consultants, and banks increasingly allocating assets to these funds. As a result, the crypto market has transitioned from retail speculation to institutional investment, with Bitcoin ETFs now holding over $150 billion in managed assets, equivalent to 6% of the total supply, while Ethereum ETFs control 5.6% of the ETH supply.
The approval of generic listing standards for commodity ETPs in September has accelerated this shift, enabling faster permits for additional crypto assets and positioning new fund launches for Solana, XRP, and other digital assets. This transition, referred to as “the great crypto rotation,” has seen the ownership of retail speculators shift to long-term institutional allocators, with traditional four-year cycle believers selling and institutions accumulating, resetting cost bases higher and determining new price floors.
Stablecoins and Tokenization
Stablecoins have evolved as trade instruments for comprehensive payments, lending, and finance functions, with the $30 billion asset market serving as a demonstration of this expansion. The latest CFTC approval for stablecoins as derivatives collateral has created institutional demand beyond purchases, while payment-oriented blockchains such as Tempo and Plasma from Tether promote the introduction of stablecoins in the real economy, rather than just for speculative trading.
Additionally, companies offering digital asset treasury (DAT) processes provide access to the stock market for tokens that lack ETF approval, enabling projects with real sales and users to tap into significantly larger markets than the crypto capital in retail. This mechanism provides exit liquidity for risk capital positions and brings institutional capital to the altcoin markets, while real-world asset (RWA) tokenization creates real capital markets on chains, establishing principles through government bonds and credit instruments.
The development of crypto is shifting from cyclical speculation to a permanent financial infrastructure, with decentralized financial protocols gaining relevance through legitimate collateral and credit markets. However, selective token performance will likely replace broad market classes, as institutional capital requires sustainable business models beyond pure narrative appreciation.
For more information, visit https://cryptoslate.com/etfs-rwas-stablecoins-ended-traditional-four-year-cycle-and-alt-seasons/
