Wintermute said exchange-traded funds have returned to positive territory and stablecoin issuance has stabilized over the past two weeks. While those developments could support the market, the firm said a full-fledged bull cycle may depend on scaling a new source of liquidity.

Previous bull cycles coincided with the emergence and expansion of new capital channels, according to Wintermute. Venture capital and initial coin offerings played that role in 2017-2018, while stablecoins became the principal new channel in 2020-2021, with annual net issuance exceeding $120 billion.

In 2024-2025, spot ETFs and Digital Asset Treasuries, or DAT, provided another route for capital. Wintermute said ETFs recorded $63 billion in net inflows, while digital treasury assets accumulated more than $115 billion.

The firm said ETFs and DAT have since become established parts of the crypto market, increasing the need for another mechanism to attract capital. It identified RWAs as a possible successor.

Tokenized-asset volume triples

Wintermute said onchain tokenized-asset volume grew roughly threefold over the past year to more than $30 billion. The sector continued to expand even when the stablecoin base was contracting, according to the firm.

The analysts said tokenization is evolving from a way to move traditional assets onto blockchains into a standalone liquidity channel. Tokenized stocks, funds and crypto assets are increasingly held in the same wallets and settled with the same stablecoins.

That structure could lower barriers between traditional assets and crypto markets, Wintermute said. Once capital used to buy tokenized stocks or funds moves onchain, it could potentially shift more easily into bitcoin, altcoins and other assets.

Wintermute said this differs from ETFs and DAT, which directly generated demand for particular crypto assets. Tokenization first brings capital into the onchain ecosystem, where it can subsequently be reallocated among assets.

RWAs remain smaller than earlier channels

The firm cautioned that RWAs remain at an early stage. The sector attracted about $16 billion over the past 12 months, roughly one-tenth of the volume that ETFs and DAT recorded during their strongest 12 months of the previous cycle.

Wintermute estimated that the current RWA growth cycle has lasted about 18 months. Earlier channels reached peak inflows between 20 and 60 months after attaining meaningful scale: ETFs at about 20 months, stablecoins at 33 months, and venture capital and ICOs at 54 months.

Adjusted RWA inflows during the past 12 months equaled about 0.9% of total crypto market capitalization, according to the firm. Wintermute said that proportion was higher than DAT at a comparable stage and only slightly below ETFs.

Most tokenized assets currently consist of cash-management products, Treasuries and money-market funds, with a significant proportion operating in closed, permissioned systems. Wintermute said regulatory changes governing market structure and tokenization could broaden the pool of participants allowed to hold and transfer tokenized securities.

The firm also pointed to increasing use of tokenized Treasuries and funds as collateral on centralized venues and in decentralized finance. It said this could turn the assets from capital-preservation instruments into working balance-sheet collateral connected to other parts of the crypto ecosystem.

Potential effect on a future cycle

Wintermute said the last bull market primarily lifted bitcoin, Ethereum and a small number of large altcoins because institutional capital entered mainly through ETFs and corporate crypto treasury holdings. As a result, the firm said, most other altcoins received little of that capital.

RWAs could produce a different market structure if tokenized balance sheets move beyond closed products and begin serving as collateral in DeFi, allowing capital to move more freely between traditional and crypto assets, according to Wintermute.

The firm expects that process to be slower than the inflows that followed ETF launches. Because institutional investors rather than retail traders hold most tokenized assets, Wintermute said an RWA-driven cycle could be longer and less abrupt.

Wintermute said it would monitor whether tokenized assets expand beyond cash-management products, gain greater use as collateral and enter DeFi. The firm considers those developments key indicators of whether RWAs are becoming a new liquidity channel for the crypto market.

Separately, Standard Chartered previously said the DeFi crisis would not stop the sector’s growth or the RWA market’s expansion to $2 trillion.

Source: Incrypted