The digital asset market has faced renewed volatility in recent weeks as investors weigh inflation data, labor market softness, and shifting liquidity conditions. Despite short term price pressure across cryptocurrencies, long term trends point to structural growth driven by stablecoins and tokenized assets.
Gerry O’Shea, head of global market insights at Hashdex Asset Management, says market weakness does not undermine the broader investment case for digital assets. Instead, he sees the current environment as a reset that highlights where durable value is forming.
Following the November CPI report, crypto prices struggled to find direction. Investor sentiment weakened as the jobs market showed signs of slowing and risk appetite faded. Even so, activity within decentralized finance continued to expand. Stablecoins and tokenized real world assets gained traction, reinforcing the view that infrastructure adoption is advancing even when prices stall.
O’Shea noted that Bitcoin’s softer performance late in the year reflects liquidity dynamics rather than declining relevance. Earlier momentum in 2025 was driven by regulatory progress and broader institutional participation. In the fourth quarter, long term holders reduced exposure as market liquidity improved, creating short term pressure without altering long term fundamentals.
Looking ahead, Hashdex expects stablecoins and tokenization growth to accelerate. O’Shea projects the stablecoin market could expand from roughly $300 billion to $600 billion as regulatory clarity improves and payment use cases scale. Legislation such as the GENIUS Act is expected to support tokenization across equities, money market funds, and other traditional assets.
Major financial leaders have reinforced this outlook. Estimates suggest tokenized assets could reach $10 trillion to $15 trillion in value over the next five years. Tokenization offers efficiency gains, broader access, and continuous settlement that traditional markets struggle to match.
Another major catalyst is the convergence of artificial intelligence and blockchain infrastructure. O’Shea explained that AI systems increasingly depend on decentralized networks for data verification, payments, and automation. As AI adoption expands, demand for blockchain native rails is expected to rise alongside it.
Institutional behavior reflects this shift. Firms including Bank of America and Morgan Stanley have begun supporting crypto exposure for clients. Hashdex now recommends a 5% to 10% allocation to digital assets for diversified portfolios, up from earlier guidance. The change reflects declining performance from traditional 60/40 portfolios and the growing role of crypto as an alternative asset class.
O’Shea emphasized that smart contract platforms stand to benefit most from these trends. As stablecoins, tokenized assets, and AI applications converge, blockchain ecosystems that support scale and security are positioned for sustained growth.
As digital assets mature, stablecoins and tokenization growth are reshaping how investors think about crypto. Price cycles remain volatile, but the underlying transformation of financial infrastructure continues. For investors focused on long term positioning, the evolution underway may prove more important than short term market swings.