From individuals to organizations: Where will the bull market capital flow come from?

Bitcoin is currently at $92.16K, but it recently touched $126K r and then dropped back down to $90K, a total decline of 28.57% from the peak. The market is now in a “withdrawal” phase—retail investors are fleeing, liquidity is drying up, and leverage reduction pressures are creating a tense atmosphere. At the same time, a question is being raised: if retail capital is no longer sufficient, where will the funds for the next upward price cycle come from?

The Local Issue: DAT Model is Gradually Weakening

Previously, there was a “magic formula” that helped the crypto market grow rapidly: listed companies called DAT—Digital Asset Treasury—issued shares, used the proceeds to buy Bitcoin and other tokens, then collateralized them for loans. The core of this model is the “capital rotation”—as long as their stock remains valued higher than the actual assets they hold, they can continue issuing more shares to buy coins.

But there is a prerequisite: the stock must always be valued highly by the market—called a premium. When the market shifts to “risk avoidance,” especially when Bitcoin drops, this high premium beta collapses quickly. At that point, issuing shares not only becomes useless but also dilutes the value for existing shareholders.

A bigger issue is scale. As of September 2025, although over 200 companies adopt the DAT strategy, with total digital assets exceeding $115 billion, this only accounts for less than 5% of the entire crypto market. This purchasing power is entirely insufficient to drive a new bull cycle. Moreover, when the market faces pressure, DAT companies often have to sell assets to survive, adding more selling pressure to the entire market.

New Direction: Open Policies and Infrastructure

If retail investors are no longer enough, and DAT cannot save the day, then the funds must come from elsewhere—organized institutions and regulatory changes.

( Fed: From Tightening to Loosening

On December 1, 2025, the Fed’s Quantitative Tightening )QT—reducing liquidity—ends. This is a decisive turning point. Over the past two years, QT has continuously drained liquidity from the global market, and stopping it means removing a major structural barrier.

According to CME “Fed Watch” data on December 9, the probability of the Fed cutting interest rates by 25 basis points in December is 87.3%. History shows that in 2020, during the pandemic, when the Fed cut rates and printed money, Bitcoin surged from around $7,000 to $29,000 by year-end. Lower interest rates reduce borrowing costs, channeling capital into high-risk assets.

A notable detail: Kevin Hassett, a potential candidate for Fed Chair, is crypto-friendly. Besides supporting rate cuts, he could open the US banking system to the crypto industry—an essential condition for pension funds and sovereign wealth funds to participate in the market.

( SEC: From Strict Censorship to Encouraging Innovation

SEC Chair Paul Atkins announced plans to implement the “Innovation Exemption” starting January 2026. This exemption will simplify compliance processes, allowing crypto companies to quickly test products within a legal framework )sandbox###. More importantly, the new framework will be clear: when a token reaches a certain level of decentralization, it will no longer be considered a security.

This provides a clear legal pathway for developers, attracting capital and talent back to the US. Even more significantly, SEC’s mindset is shifting: in its 2026 priority list, crypto is no longer viewed as an “emerging threat” but integrated into regular oversight topics. This change removes compliance barriers, making it easier for large organizations to include digital assets in their portfolios.

Three Capital Pipelines About to Open: Where the Money Really Goes

( Pipeline 1: Institutional Deployment Begins

Bitcoin spot ETFs approved in the US from January 2024, and Hong Kong also approves Bitcoin and Ethereum ETFs. This regulatory consensus makes ETFs a standard channel for international capital to enter quickly.

But ETFs are just the entry point. More important are companies like Anchorage Digital, along with global custodians )including New York Mellon###, providing custody and settlement services at the institutional level. Middleware technologies like BridgePort enable investment organizations to operate without pre-funding, significantly improving capital efficiency.

Targeted mainly at pension funds and sovereign wealth funds, legendary investor Bill Miller predicts that in 3-5 years, financial advisors will recommend clients allocate 1%-3% of their portfolios to Bitcoin. Although this seems small, given the trillions of dollars in global institutional assets, 1%-3% translates into trillions of dollars flowing into the market.

Indiana has proposed allowing pension funds to invest in crypto ETFs. UAE’s sovereign wealth fund partnered with 3iQ to launch a hedge fund targeting 12%-15% returns, immediately attracting $100 million. These institutional flows are highly predictable, less volatile, and entirely different from retail investors chasing waves.

( Pipeline 2: RWA—The Bridge of Trillions

RWA )Real World Asset—tokenized real-world assets### could be the most critical factor for the next cycle. RWA involves converting traditional assets (bonds, real estate, artworks) into tokens on the blockchain.

As of September 2025, the global RWA market is about $3.091 trillion. However, according to Tren Finance, by 2030, this market could grow over 50 times, reaching $4-30 trillion—a figure far exceeding any current crypto pool.

Why is this so important? Because RWA solves the “language barrier” between traditional finance and DeFi. When US Treasury bonds are tokenized on the blockchain, traditional finance and crypto start to “speak the same language.” RWA offers stability, predictable yield streams for DeFi, reduces volatility, and provides non-crypto-originated income for institutional investors.

Protocols like MakerDAO and Ondo Finance, by bringing Treasury bonds onto the blockchain, have become magnets for institutional capital. MakerDAO is now one of the largest DeFi protocols, with billions of USD in US bonds as collateral for the DAI stablecoin. This demonstrates that when legitimate yield products backed by traditional assets emerge, traditional finance is ready to deploy capital actively.

Pipeline 3: Technological Infrastructure Must Advance

Regardless of whether capital comes from institutional allocations or RWA, transaction infrastructure must be efficient and low-cost enough to handle large flows.

Layer 2 solutions process transactions off the mainnet, reducing gas fees and confirmation times. Platforms like dYdX, thanks to L2, can create and cancel orders instantly—something impossible on Layer 1. This speed is essential for handling high-frequency institutional capital flows.

Stablecoins are more necessary than ever. According to TRM Labs, by August 2025, stablecoin on-chain transaction volume exceeded $4 trillion, up 83% year-over-year, accounting for 30% of total transaction volume. Total stablecoin market cap reached $166 billion, becoming a pillar of cross-border payments. Rise reports that over 43% of cross-border B2B payments in Southeast Asia use stablecoins.

As regulators (such as Hong Kong Monetary Authority) require stablecoin issuers to maintain 100% reserves, the status of stablecoins as on-chain legal money is reinforced, ensuring organizations can transfer capital efficiently.

Timeline: Which Way Will the Money Flow?

( Short-term )End of 2025 - Q1 2026###: Policy-Driven Recovery

If the Fed truly ends QT and cuts interest rates, and SEC’s “Innovation Exemption” takes effect in January, the market could see a rebound. This phase is mainly driven by sentiment—clear regulatory signals encourage risk capital to return. But this capital is highly speculative, volatile, and hard to sustain long-term.

( Medium-term )2026-2027###: Institutional Capital Participation

As global ETFs and custody infrastructure mature, liquidity will mainly come from regulated institutional funds. Strategic allocation decisions by pension funds and sovereign wealth funds will start to take effect. This capital is patient, leverageless, providing a stable foundation for the market, not chasing short-term waves.

( Long-term )2027-2030###: RWA Could Bring Structural Change

Sustainable long-term liquidity must rely on tokenized RWA. RWA brings the value, stability, and income streams of traditional assets onto the blockchain, potentially boosting DeFi’s TVL to trillions of USD. RWA directly links the crypto ecosystem to the global balance sheet, ensuring sustainable growth rather than cyclical speculation.

Conclusion: From Fringe to Mainstream

Previous bull cycles relied on retail investors and extreme leverage. If there is a next cycle, it will depend on institutions, infrastructure, and integration with traditional assets.

The market is gradually moving from the sidelines into the mainstream. The question is no longer “Can I invest?” but “How to invest safely and effectively.” Capital will not flow suddenly, but these three pipelines are being built day by day. Over the next 3-5 years, they may gradually expand.

By then, crypto will no longer compete for retail attention but will depend on institutional trust and allocation limits. This is a shift from speculation to infrastructure development—a necessary path for the crypto market to mature.