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Crypto Institutional Adoption Gains Momentum as DeFi, Stablecoins Expand

Market Movers: The Opening Bell

December 29, 2025

Video Transcript

Stablecoins and tokenization among the top Defi trends of 2025, and they're only expected to grow further, with analysts expecting both industries to reach the trillions in the next decade.

While crypto adoption accelerated this year, investors dealt with extremely disappointing price action, especially the last few months.

Most tokens, including the majors, finish the year in negative territory.

Anthony Georgiadis joins us now, founder and general partner at Innovating Capital.

Welcome back.

So how will crypto increasingly function, you think, as financial infrastructure as we turn the page in 2026?

Definitely.

So, I think the biggest thing to watch since 2026 is we're going to continue to see institutional adoption accelerate.

You'll see ETF allocation, bigger corporate treasuries, and even bank service offerings that will continue to expand, assuming that a lot of the regulatory clarity holds.

In addition to that, as you alluded to, stable coins will begin to function as real financial rails.

Expect to see deeper incorporation of regulatory stablecoins and traditional finance payments, and treasury options, especially with clarity stemming from the Genius Act.

Uh, the last thing I'd say is really market structure legislation.

We're seeing a lot of bipartisan US legislation and this is only going to further formalize the rulebook for digital assets overall.

This is what we kind of view as a tipping point for this institutional capital deployment overall.

Anthony, despite the fact that we've had all of this regulatory progress that has been made, what's your best sense as to why the crypto majors and really the price action of those crypto majors have slumped the last three months the way they have?

Well, there's a few components to it, right?

So if you, if you look at the regulatory impact on crypto, regulation is more so moving from uncertainty to structure as I alluded to with respect to the Genius Act passing earlier this year, as well as US regulators and Congress advancing legislation like the Clarity Act which has codified registration and disclosure requirements for crypto markets and this regulatory shift has taken hold globally.

Um, stable points have become institutional plumbing, integrated into payments, cross-border settlement, and corporate balance sheets.

This sets the weight on the pavement for long-term institutional adoption, but to an extent what we've seen is a little bit of, you know, selling of the news.

2025, you saw over $150 billion in derivatives liquidations as leverage was just flushed straight out of the market.

ETFs, which were a huge hot talking point earlier in the year, have swung from major inflows to really meaningful outflows.

Bitcoin and ETTFs in particular saw billions in net redemptions, which obviously compounded this downward pressure on price.

Simultaneously, if you look at futures, the open interest has tumbled significantly as a lot of the speculative positions have unwound.

So price action has seemed to be more or less.

Range bound, reflecting somewhat of a shift from leveraged speculative swings off the backing of this regulatory tailwind, but to more a balance between smart money and risk on flows, which goes back to the fact that crypto has and continues to behave to an extent as a risk on asset that's been very much correlated to the broader market and monetary policy.

Anthony, let's broaden this out a little bit.

Talk to me about more of your expectations for 2026.

Could be on the regulatory front, the institutional adoption front, or general price action trends and catalysts on your radar.

Yeah, so, you know, looking at the institutional impact on crypto, it's obviously real and structural, you know, these Bitcoin and Ethereum ETFs, albeit, you know, some of the net outflows recently, have become major capital movers, not just retail, you know, toys or tools.

Institutional flows will continue to find their way into broader portfolio construction, and long only investors in corporate treasuries are continuing to position strategically, not just through daily trading overall.

Traditional banks, most banks you can think of are evaluating crypto trading services for institutional clients, and this is, you know, signaling moving from exploration to hard-hitting integration.

I also think we're going to see a lot of M&A in digital assets.

We saw record volumes in 2025 as institutions continue to buy infrastructure, um, and have really positioned themselves from a regulatory framework ahead of 2026.

So I think 2026 is going to be a huge year in the, in the framework of M&A as it pertains to digital assets.

Institutional capital isn't just tight at this point, um, it's becoming a strategic, strategic allocation in multi-asset portfolios.

Anthony Georgiadis is the founder and general partner at Innovating Capital.

Thanks a lot for taking the time to help us kick off this trading week, this holiday trading week on Wall Street.

All the best for the new year.

Anthony, thanks for being here as always.

Good to see you.

Thank you.

Great for having me.

The landscape of cryptocurrency continues to evolve, reflecting a world increasingly leaning towards innovation in finance and technology. With increasing trends in decentralized finance (DeFi) and tokenization, particularly stablecoins, the trajectory towards a transformative financial infrastructure is more evident than ever. The founder and general partner at Innovating Capital, Anthony Georgiades, shared valuable insights about what we can expect from the crypto market as we advance into 2026.

As we turn the page into the new year, analysts observe that both DeFi and stablecoin industries are poised to grow significantly, potentially reaching trillions in market capitalization in the next decade. Despite the sharp downturn in prices of major cryptocurrencies over the recent months, the underlying momentum towards institutional adoption remains robust. Georgiades emphasized that the year 2026 is likely to witness an acceleration in institutions embracing cryptocurrency as a mainstream financial infrastructure.

A pivotal factor driving this shift is the institutional adoption of cryptocurrencies. Georgiades noted that, with the expected approval of Exchange-Traded Funds (ETFs), corporate treasury allocations will likely continue to gain traction. Moreover, as regulatory frameworks become clearer, traditional financial institutions will increasingly recognize stablecoins as legitimate financial rails. This backdrop, shaped by regulations such as the Genius Act, signals a move towards deeper integration of stablecoins and traditional payment systems, presenting prospects for innovation in cross-border settlements and corporate finance.

Despite the promising regulatory landscape, the recent performance of major cryptocurrencies has raised eyebrows. Georgiades pointed out several components contributing to the adverse price action observed in the market. As regulatory clarity emerges with new legislation like the Clarity Act, which codifies registration and disclosure requirements, the market shifted from speculative trading to a more balanced approach where smart money plays a crucial role.

Georgiades explained the phenomenon of “selling the news,” where the initial euphoria surrounding developments—like the anticipated approval of ETFs—resulted in significant liquidations in the derivatives market. Over $150 billion in derivatives were liquidated in 2025, showcasing the volatile nature of crypto trading. This volatility was compounded by a trend of outflows from ETFs, with Bitcoin and Ethereum experiencing significant net redemptions. This underscores the ongoing correlation between crypto assets and broader market trends, reflecting a cautious sentiment among investors.

As we focus on the future, Georgiades anticipates that institutional impacts on cryptocurrency will solidify. The anticipated increase in Mergers and Acquisitions (M&A) activity in the digital asset space indicates that institutions are not merely dabbling in crypto but are making strategic moves towards building robust frameworks for integration. By 2026, we are likely to see further maturation in portfolio construction that increasingly includes cryptocurrencies as a long-term investment strategy.

Furthermore, the ongoing evaluation of crypto trading services by traditional banks hints at a broader shift from exploratory phases to actual incorporation of crypto into mainstream financial services. The conversation has shifted towards long-term investment strategies rather than short-term trading exploits. This indicates a transformative phase characterized by strategic institutional allocations that are reshaping how digital assets are perceived and utilized.

The evolution of cryptocurrency continues to unfold against the backdrop of emerging technologies like AI, which will further augment the scope of blockchain and finance. Innovations surrounding sustainability investing also marry well with the principles governing decentralized finance and cryptocurrencies. This intersection of technology, finance, and sustainable development goals (SDGs) is driving a new wave of entrepreneurs and investors keen on harnessing the potential of digital assets for impactful solutions.

In conclusion, as cryptocurrency gears up for another transformative year in 2026, the stage is set for institutional integration, regulatory clarity, and innovative financial products. Anthony Georgiades’ insights shed light on the promising future of crypto, highlighting that while the current market dynamics might seem challenging, the underlying trends and anticipated regulatory frameworks provide a solid foundation for growth in DeFi and beyond. Institutions are moving toward strategic investments in digital assets, preparing for a future where cryptocurrencies become a standard component of financial portfolios worldwide.

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