Where is the next wave of bull market money? Institutional funds, RWA, and institutional innovation are rewriting the game rules.

Bitcoin has retreated from its high point to the current $90.16K, and the market has undergone a deep correction. Liquidity has dried up, and deleveraging pressures remain heavy. Data from Coinglass shows that forced liquidation events continue to impact the market.

But behind the short-term pain, some structural positive factors are converging: the U.S. SEC’s “Innovation Exemption” rule is about to be implemented, the Federal Reserve has initiated a rate cut cycle, and global institutional channels are rapidly maturing. This is the biggest current market contradiction—short-term pressure versus long-term opportunities waiting to emerge.

The question arises: where will the next wave of incremental funds for a bull market come from?

Retail investor funds are a thing of the past; why is the DAT model struggling to support a new bull market?

A once-shining investment myth is losing its luster.

Digital Asset Treasury (DAT) was once an innovative window for institutional entry into crypto—public companies issued stocks and debt to purchase crypto assets, then amplified returns through active asset management (staking, lending, etc.). Its core logic is the “capital flywheel”: as long as the stock price continues to trade at a premium to the net asset value (NAV) of the crypto holdings, the company can issue new shares at high prices and buy coins at low prices, continuously rolling over and expanding capital.

It sounds perfect, but there is a fatal premise: the premium must always exist.

Once market risk appetite declines, especially during significant crypto corrections, this high-beta premium can rapidly collapse, even reversing into a discount. Losing the premium, DAT companies’ financing ability dries up, and they may even become additional selling pressure in the market.

Data reveals a deeper issue: as of September 2025, over 200 companies have adopted the DAT strategy, holding more than $115 billion in crypto assets, but this accounts for less than 5% of the total crypto market size. This means that retail and DAT-aggregated funds simply cannot support the capital needs of the next bull run.

Worse still, when the market is under pressure, DAT companies may need to sell assets to maintain operations, further exacerbating downward market pressure. The market must find larger-scale, more stable, and truly supportive capital sources for a bull market.

Federal Reserve rate cuts and SEC deregulation: from regulatory constraints to institutional empowerment

Structural liquidity shortages can only be broken through institutional reforms.

Federal Reserve: Opening two doors to liquidity

In December 2025, the Fed officially ended quantitative tightening (QT). This moment is significant—over the past two years, QT has been draining liquidity from global markets, and its end signifies the removal of a major structural constraint.

More critically, the rate cut cycle has begun. The Fed has started lowering interest rates, which will directly reduce borrowing costs and push capital toward high-risk, high-return assets. Historical benchmarks are clear: during the 2020 pandemic, the Fed’s easing policies drove Bitcoin from about $7,000 to around $29,000 by year-end.

Another variable worth noting: crypto-friendly policymakers like Kevin Hassett are gaining more influence. Their impact is reflected in two dimensions—

One is “liquidity providers”—controlling the monetary policy stance, which determines market cost structures; the other is “gate openers”—deciding the openness of the U.S. banking system to the crypto industry. If crypto-friendly leadership is established, it could accelerate policy coordination between FDIC and OCC on digital assets, which is a prerequisite for large-scale entry of sovereign funds and pension funds.

SEC: From “braking” to “accelerating” regulation

SEC Chairman Paul Atkins has announced that the “Innovation Exemption” rule will be officially launched in January 2026. The core value of this exemption is to simplify compliance processes, allowing crypto companies to iterate products more quickly within regulatory sandboxes. The new framework will also update token classification systems and introduce “sunset clauses”—once a token reaches a certain level of decentralization, its securities status automatically terminates. This provides developers with a clear legal pathway.

Deeper changes stem from the SEC’s strategic shift.

In its 2026 regulatory priority list, the SEC has removed cryptocurrencies from its standalone risk list for the first time, instead emphasizing data protection and privacy. This “de-risking” statement indicates that crypto assets are shifting from “emerging threats” to “components of mainstream financial infrastructure.” This cognitive shift removes compliance psychological barriers for traditional institutions, making digital assets easier for corporate boards and asset managers to accept.

Three major capital channels are opening

If retail funds and DAT are insufficient, where could the real big money supporting the next bull market come from? The answer may lie in the three capital channels currently being laid out.

Channel 1: Standardized path for institutional tentative entry

ETFs have become the preferred method for global asset managers to deploy funds into crypto. After the U.S. approved a spot Bitcoin ETF in January 2024, Hong Kong also approved spot Bitcoin and Ethereum ETFs. This global regulatory convergence makes ETFs a standard deployment tool for international capital.

But ETFs are just the beginning. Institutional investors are shifting focus from “whether to participate” to “how to participate safely and efficiently.” This requires mature custody and settlement infrastructure.

Global custodians like BNY Mellon already offer digital asset custody services; platforms like Anchorage Digital provide institutional-grade settlement infrastructure through integrated intermediary software (e.g., BridgePort). The advantage of these collaborations is that institutional investors can deploy positions without pre-committing large sums, greatly improving capital efficiency.

The most promising are systemic allocations by pension funds and sovereign wealth funds.

Billionaire investor Bill Miller has said he expects, within three to five years, financial advisors will start recommending 1%-3% allocations of Bitcoin in portfolios. Although this percentage seems small, for the tens of trillions of dollars in global institutional assets, this 1%-3% allocation could mean trillions of dollars in potential inflows.

Indiana has proposed allowing state pensions to invest in crypto ETFs; UAE sovereign investors have partnered with 3iQ to launch a hedge fund that has attracted $100 million, targeting an annualized return of 12%-15%. Such institutionalized processes ensure predictable and long-term capital inflows, quite different from the short-term speculative DAT model.

Channel 2: RWA—A multi-trillion bridge connecting traditional finance and DeFi

Tokenization of RWA (Real-World Assets) may be the most critical engine supporting the next bull market.

RWA’s essence is simple—converting traditional assets (bonds, real estate, art, etc.) into digital tokens on the blockchain. This solves a fundamental problem: the “language barrier” between traditional finance and DeFi. Tokenized bonds or treasuries enable dialogue between the two worlds.

What is the scale? As of September 2025, the total global RWA market cap is about $30.91 billion. But this is just the beginning. According to Tren Finance, by 2030, the tokenized RWA market could grow over 50 times, with most institutions expecting a market size of $4-30 trillion. This figure far exceeds any existing native crypto capital pools.

Why can RWA become a bull market engine? Because it brings stable, yield-supported assets to DeFi, reducing volatility and providing institutions with non-native crypto income sources. Protocols like MakerDAO and Ondo Finance have demonstrated this—by bringing U.S. Treasuries on-chain as collateral, they attract institutional capital.

MakerDAO’s integration of RWA has made it one of the largest TVL protocols, with billions of dollars in U.S. Treasuries backing DAI. This indicates that when compliant, traditional-asset-backed yield products emerge, traditional finance will actively and massively deploy capital.

Channel 3: Infrastructure upgrades enabling large-scale processing

Whether capital comes from institutional allocations or RWA integration, high-efficiency, low-cost transaction settlement infrastructure is a prerequisite for large-scale adoption.

Layer 2 solutions process transactions outside the Ethereum mainnet, significantly reducing Gas fees and shortening confirmation times. Platforms like dYdX offer fast order creation and cancellation via L2—impossible on Layer 1. This scalability is crucial for handling high-frequency flows of institutional capital.

Stablecoins also play a key role. According to TRM Labs, by August 2025, on-chain stablecoin transaction volume exceeded $40 trillion, growing 83% annually, accounting for 30% of all on-chain transactions. The total market cap of stablecoins reached $166 billion, becoming a backbone for cross-border payments.

Trise reports that over 43% of B2B cross-border payments in Southeast Asia are conducted with stablecoins. As regulators like the Hong Kong Monetary Authority require stablecoin issuers to maintain 100% reserves, stablecoins’ status as compliant, highly liquid on-chain cash tools is solidified, ensuring institutions can transfer and settle funds efficiently.

From short-term rebound to long-term growth: the evolution path of the bull market

If these three channels truly open gradually, what trajectory will the capital supporting the next bull market follow?

The market’s short-term correction reflects a necessary deleveraging process. But more importantly, structural indicators suggest that the crypto market may already be on the threshold of a new wave of large-scale capital inflows.

Short-term window (late 2025 - Q1 2026): Policy-driven psychological recovery

The end of Fed QT and the confirmation of rate cuts, along with the implementation of the SEC “Innovation Exemption” rule, could trigger a policy-driven market rebound. This phase mainly relies on psychological factors—clear regulatory signals and liquidity cues will bring risk capital back. But this capital is highly speculative and volatile, with uncertain sustainability.

Mid-term phase (2026-2027): Systematic institutional allocations

As global ETFs and custody infrastructure mature, liquidity will mainly come from regulated institutional pools. Small-scale allocations by pension funds and sovereign funds will begin to take effect. These capital sources are characterized by patience and low leverage, providing a stable foundation for the market, unlike retail chasing rallies.

Long-term evolution (2027-2030): RWA tokenization driving structural bull market

Sustained large-scale liquidity will ultimately require RWA tokenization to anchor and support it. RWA will bring traditional assets’ value, stability, and yield streams onto the blockchain, potentially pushing DeFi’s TVL into the trillions. RWA links the crypto ecosystem directly to global balance sheets, possibly ensuring long-term structural growth rather than cyclical speculation.

If this path is confirmed, the crypto market will truly move from the fringes to the mainstream, with the driving force shifting from retail sentiment to institutional allocations.

Epilogue: From speculation to institutionalization—the maturation path of the bull market

The last bull market relied on retail enthusiasm and leverage multipliers.

If the next bull market arrives, it will likely depend on institutional certainty and infrastructure maturity.

The market is transitioning from the fringes to the mainstream. The focus has shifted from “whether to invest” to “how to invest safely.” Capital won’t arrive suddenly, but the channels supporting inflows are already being laid out.

In the next three to five years, these channels will gradually open. By then, the crypto market’s competition will no longer be for retail attention but for institutional trust and allocation. This is the shift from speculation to institutionalization, and it is also the necessary path for the bull market to mature from frenzy to stability.