In conclusion: The next three years will see a major bull market led by institutions, signifying that crypto and blockchain technology have officially and comprehensively entered Wall Street's balance sheets, and mass adoption has been finally achieved through a top-down revolution.

Crypto's Mass Adoption will not be the central bank-free revolution originally envisioned by Satoshi Nakamoto, but rather a top-down upgrade of global financial infrastructure.

Retail investors are like the tide, institutional investors are like the sea.

The tide may recede, but the sea will not.

Looking back at 2025: Why is this bull market the "Year of Institutional Investors"?

The reason is as follows: Almost all the funds for BTC/ETH come from institutions; retail investors are all trading memes and altcoins.

In 2025, all major cryptocurrencies hit new all-time highs: BTC 126k, ETH 4953, BNB 1375, Sol 295.

1. The explosive growth of ETFs and institutional channels (such as DAT)

 2024-2025 ETF Large Inflow Events

In 2024–2025, digital asset funds saw net inflows of $44.2 billion , while ETF holdings of spot BTC reached 1.1 million–1.47 million BTC ( representing 5.7%–7.4% of the total circulating supply).

This marks the first time in history that Bitcoin access has been monopolized by ETFs, with retail investors failing to participate in the main upward wave of the bull market .

2. So where did the retail investors go?

Structured data from TheBlock:

• In 2025, institutional investors accounted for 67% of BTC/ETH allocations.

• Retail investors accounted for only 37%, and they primarily shifted towards memecoins and short-term assets with no substantial value.

Retail investors didn't buy BTC/ETH; it was institutional investors who drove the BTC bull market.

3. How are bull markets formed?

Let's look at some data first:

• BTC balance on exchanges falls to a 6-year low: 2.45-2.83 million coins

• ETF and custody relocation resulted in a 6.6% decrease in "tradable supply".

• Large transactions (>$1 million) accounted for a record high percentage of on-chain traffic.

This is a typical "liquidity shock bull market," where a small amount of tradable shares plus continuous institutional buying equals an extremely strong trend.

Why will institutions start to fully enter the market in 2025?

In conclusion: Regulations have been implemented and institutional demand is high.

US regulations have been clearly defined, marking the first time that "entry points for legitimate organizations" have been opened.

• Stability Act and Stablecoin Regulatory Framework : Banks can compliantly use USDC/TUSD-like stablecoins for settlement.

• ETF approval : Fully opening the floodgates for pension funds and insurance companies.

The fundamental changes in regulation have enabled institutions to legally, compliantly, and on a large scale enter the crypto asset market.

Institutional demand far exceeds supply: Structural imbalances are amplifying.

 A summary of institutional demand and supply for BTC from 2020 to 2025; a supply-demand reversal began in 2024.

Core data from Bitwise:

As of 2025, institutional demand for BTC was approximately $976 , while the actual available supply was only $12 billion , resulting in a supply-demand ratio of 80:1 .

This means that without the participation of retail investors, prices could be easily inflated several times over .

How will institutional funds continue to flow into the next major bull market?

If the market performance in 2025 validated the initial signs of an "institutionally driven bull market," then the next three years will be a period in which this trend fully unfolds. To understand this, we must start with the structure of traditional financial assets themselves .

By looking at the total assets of traditional financial institutions and the proportion managed by different institutions, we can estimate the magnitude of potential inflows of funds.

In traditional finance, asset allocation determines who has the "real money."

Global investable assets size (2024 data):

Of these, 70%–80% are controlled by institutions (pension funds, sovereign wealth funds, insurance companies, banks, hedge funds, and asset management companies) .

 The proportion of equity assets held by institutions (2017 data)

When the underlying infrastructure of cryptocurrencies receives more than $400T (trillions) of traditional assets (for comparison, the current market capitalization of BTC is 1.8T) , the inflow will no longer be the kind of retail investor sentiment seen in the past, amounting to billions.

Every 1% adjustment in asset allocation equals a migration of trillions of dollars, which would double the market capitalization of Bitcoin.

This is why ETF/RWA is the root narrative for the next major bull market.

Long-term impact on mainstream assets

Simply put, it's about making BTC gold and ETH equity.

BTC: Institutional Reserve Asset

• ETF holdings continue to rise, while liquidity continues to decrease.

• Prices will become increasingly institutionalized, trend-driven, and characterized by a slow and steady upward trend.

• Bitcoin has become true "digital gold," and central banks around the world have begun to hold it in reserves.

ETH: The "Equity Asset" of the Global On-Chain Economy

Unlike BTC, which is a "commodity-like asset," ETH has attributes closer to "equity":

• ETH is experiencing a mix of inflation and deflation, trending towards deflation.

• ETH staking rewards are "dividends" from the on-chain economy.

• The value of ETH is positively correlated with the total on-chain GDP.

• ETH's pricing logic is based on "network size × usage".

The long-term value of ETH = the market capitalization of the global on-chain economy × the tax rate model of ETH.

This is stronger than tech giant stocks because it is "equity at the level of financial infrastructure".

How will the role of retail investors be completely changed?

Simply put, retail investors have shifted from being narrative creators to price followers (this only applies to mainstream sectors; meme speculation is another matter). They no longer create bull markets; they merely ride the wave.

Market characteristics dominated by institutions:

• The trend is more stable (long-term funds).

• The influence of emotions is reduced.

• Liquidity is thinner (buying and selling are dominated by whales).

Therefore, retail investors must adjust their strategies:

• From Emotional Trading to Trading with Large Capital Flows

• From finding 100x coins to finding structurally sound long-term investment opportunities.

• From short-term trading to cross-cycle trading

Where are the opportunities for VCs and entrepreneurs?

The most certain sectors for VCs over the next three years:

1. Enterprise-grade blockchain

Simply put, nobody wants their pension funds and bank deposits on Ethereum or Solana, so there needs to be a solution tailored to enterprise needs.

Enterprise-level requirements include:

• Privacy (which public blockchains cannot achieve)

• Compliance (KYC, AML, etc.)

• Controllability (governance can be upgraded or revoked)

• Low cost & stability

Therefore, organizations cannot use public blockchains for their core business, but instead use enterprise-grade blockchain solutions (although they may sound like consortium blockchains) such as Hyperledger Fabric and R3 Corda.

Institutions won't run their core business on Ethereum, but they will buy BTC/ETH on ETFs, DAT, and RWA. Assets reside on public blockchains, business operations run on enterprise blockchains, and the bridging is handled by DeFi—this is the architecture of the future.

2. Bridging + ZK (private ↔️ public)

• cross-chain

• cross-market

• Cross-regulatory regions/countries

• Cross-asset (RWA ↔️ Public chain assets)

Enterprise-grade blockchains need to communicate with public blockchains, thus requiring bridging to connect institutional private blockchains to public blockchains . ZK technology may be a potential solution, but I'm not an expert in this area and won't comment further.

3. MPC, custody, and asset management tools

The growth of Fireblocks, Copper, and BitGo classes will be exponential.

4. RWA & Settlement Layer

• Treasury bonds

• Private Credit

• commodity

• Foreign exchange

• The settlement layer (similar to an on-chain version of the SWIFT network; this part involves payments and is very complex, and I will write a separate article about it when I have the chance)

VCs, take note: this is a trillion-dollar opportunity.

in conclusion

The next bull market will not be a victory for crypto, but a victory for Wall Street.

You will see the following in the next three years:

• JPM, BlackRock, and Citi have on-chain scales exceeding most L1 blockchains.

• Retail investors' influence on mainstream cryptocurrency prices has fallen to an all-time low.

• Trillions of dollars are being put on the blockchain through ETFs, RWA, and enterprise blockchains.

• Web3: From Narrative Economy to Global Financial Infrastructure

The mass adoption of crypto has already occurred, but it is not a replacement for central banks; rather, it represents an upgrade and revolution in financial infrastructure.

In conclusion:

Retail investors are dead; institutional investors must rise.

Instead of fantasizing about 100x returns, it's better to understand the logic of capital. The next bull market will be priced by institutions, driven by enterprises, and determined by infrastructure. Opportunities still exist for retail investors, but the methods have changed. Understand structural trends and position yourself where the institutions are headed .

To quote a trader I admire, cryptocred: Don't go against the trend, be a friend of the trend.

Next episode preview: How to establish a systematic long-term investment logic for BTC, ETH, and BNB, and plan ahead. Follow a frontline investor and entrepreneur (https://x.com/chelsonw_) for regular cutting-edge industry analysis.