Crypto and the Future of Financial Markets
It’s hard to overstate how consequential 2025 was for Galaxy, Galaxy Asset Management (GAM), and the global crypto industry. Galaxy became a Nasdaq-listed company, tokenized its listed stock, and initiated the transformation of its Bitcoin mining business into one of the world’s largest AI data center campuses, with hyperscaler CoreWeave as the anchor tenant. GAM alone garnered over $2B of net inflows, closed Venture Fund I, expanded its managed account platform, and added to its suite of ETF offerings in multiple jurisdictions.
Looking back, the crypto industry and the broader financial services industry may remember 2025 as the pivotal point for regulation in the U.S. For the first time, the legislative and executive branches of the U.S. government worked together to establish a coherent regulatory framework for cryptocurrency. The establishment of the Strategic Bitcoin Reserve (SBR), the Securities and Exchange Commission’s (SEC) repeal of SAB 121, and guidance from the Federal Reserve and banking regulators allowing banks to custody and interact with digital assets marked watershed moments. The passage of the GENIUS Act in July, followed by SEC Chairman Paul Atkins’ “Project Crypto” speech, reframed crypto innovation as a generational top priority. And with the CLARITY Act already passed the House and companion legislation making progress in the Senate, the policy trajectory for cryptocurrency in the U.S. has become meaningfully clearer.
With the slew of regulatory advancements and the newfound emphasis on U.S. leadership in crypto innovation, we saw the market echo that shift: U.S. spot crypto ETFs attracted approximately $31 billion in inflows in 2025; 75+ crypto-linked ETFs launched globally; 10+ U.S. stablecoins were introduced in partnership with traditional financial institutions; 200+ companies worldwide added digital assets to their balance sheets; several global firms launched their own layer-1 blockchains; and 10+ crypto firms successfully IPO’d or uplisted in the U.S. It’s worth noting that despite this wave of progress, aggregate crypto market cap finished the year down 10%, largely driven by heavy whale distribution, rotation into competing narratives including AI, gold, and stablecoins, and poor performance of BTC treasury companies. In our view, this represents a natural (even healthy) rotation of capital akin to post-IPO equity offerings. And importantly, the pace of crypto infrastructure adoption appears to be marching forward, unphased by short-term price action.
GAM also advanced meaningfully during this period of structural change. We were thrilled to close Galaxy Ventures Fund I (GVF I) at $178 million. We grew the fund beyond our initial fundraise target to meet the broadening of the opportunity set as well as the demand from our partners and investors while remaining disciplined in the ultimate sizing of the fund. As of Sept. 30, 2025, GVF I has made 20 investments and is approximately 50% invested, with the portfolio generating a 2.1x Multiple of Invested Capital.[1] To date, the fund has produced two co-investment opportunities for investors. Within the portfolio, companies such as Ethena, RedotPay, Rain, and Yellowcard exemplify our conviction around the stablecoin thesis and the buildout of global payments and financial infrastructure. Away from the venture franchise, GAM has also expanded its managed account platform to $2.5 billion this year, reinforcing our position as a strong institutional partner for bespoke yield enhancement strategies. In our ETF business, we continue to introduce new products via our global partnerships, including CI Galaxy Core Multi-Crypto ETF (CCCX), CI Galaxy Solana ETF (SOLX), and most recently the Invesco Galaxy Solana ETF (QSOL). Importantly, these products are designed to broaden investor access to digital assets within regulated structures, while layering in innovative features like staking as well as in-kind creation and redemption mechanisms.
So, What's Next?
Nothing can introduce our core “Great Convergence” theme more pointedly than announcing the hiring of Joe Armao, who is joining Galaxy from Senator Investment Group to launch and manage the Galaxy Fintech Fund. Joe has a deep, fundamental equity long/short background and a track record spanning almost two decades as an investor at Blackstone and Senator. We share the view that crypto infrastructure, paired with AI-driven disruption, will drive a long-term, structural shift in financial services, surfacing both winners and losers and alpha opportunities on both sides. This thesis is already playing out in the U.S. with the emerging arms race between Robinhood and Coinbase to become the “everything app,” and it is deeply synergistic with our financial rails and stablecoin focus on the privates and venture side of our business. In our operating businesses, we see myriad examples of the convergence between crypto infrastructure and institutional finance, from increased stablecoin and tokenization adoption to the addition of in-kind create and redeem mechanisms to crypto ETFs, and seek to use our collective operating and investment experience to generate alpha for our investors.
Underpinning this “Great Convergence” thesis are two narratives which unfolded in 2025, both of which matter deeply to where we are headed:
Crypto as a Financial Asset: Bitcoin’s evolution into a store of value accelerated as scarcity and institutional validation reshaped investor behavior. At the start of 2025, among wealth management platforms, few firms had publicly articulated recommended bitcoin allocation targets, with BlackRock standing out as the largest asset manager through its research and model portfolio guidance suggesting a 1%-2% allocation. But by year-end, three of the four major wirehouses (Wells Fargo, Morgan Stanley, and Bank of America) lifted restrictions for advisors to recommend bitcoin allocation and began advising a 1%-4% allocation. Along with strong spot ETF flows, these changes point to a growing comfort among investors treating crypto as a strategic asset class alongside equities, bonds, and commodities. We expect a similar adoption trajectory to emerge for other crypto “majors”, including Ethereum and Solana.
Crypto as a Financial Rail: Alongside the passage of the GENIUS Act, stablecoins became one of the fastest-growing sectors this year, increasingly recognized as a superior payment rail. At the same time, the first tokenized equities began trading on Solana as its institutional moment arrives, with onchain activity meeting scale. We see blockchains showing real potential to integrate with the financial system and improve it with faster settlement, lower fees, and more convenient access.
The transformation underway is one of reciprocal learning. TradFi is integrating crypto’s breakthroughs of programmability, real-time settlement, and open access, while crypto is adopting the governance, distribution, and operational standards that define mature financial markets. High-performance layer-1 blockchains (L1s) are emerging as the execution backbone for this synthesis, with stablecoins and tokenized assets forming a programmable layer that natively represents money, collateral, and financial instruments. Adjacently, equity markets are undergoing a broader re-rating driven by unprecedented investment in AI, compute, and energy infrastructure. AI is witnessing record real-world demand, and it requires operational systems that can settle transactions instantly, verify data, and transact with programmable collateral. To support that kind of system, the expansion of compute capacity, data centers, and energy supply is creating the physical substrate that powers digital economies.
Blockchains, traditional financial markets, and AI anchor our 2026 thesis: the next phase of market evolution will be driven by the convergence of programmable assets, institutional-grade financial infrastructure, and scaled compute, forming the underlying architecture of a more efficient and globally connected financial system.
New Foundation
Public blockchains are emerging as unified, global ledgers for the future of finance. Their ability to settle value instantly, operate across borders, remove intermediaries, and embed transparency and programmability into transactions increasingly characterize them as structurally superior rails for a world that is becoming more digital, more automated, and more interconnected. We are seeing that vision materialize in real time: blockchains process nearly 100× more transactions today than in 2020, and nearly half of the Fortune 100 are now using blockchains in some fashion. These are not experiments but early signals of what the financial system could look like at scale.
Ethereum’s progress last year shows where this transformation is headed. Upgrades like Pectra and Fusaka expanded the network’s ability to serve as a global settlement layer by increasing throughput, easing validator requirements, and enabling the next wave of rollup-driven activity. As more institutions tokenize assets, settle stablecoin flows, and connect real-world financial processes to the chain, Ethereum’s layered architecture could become a neutral, programmable foundation on which global finance can run. This is where institutional settlement is heading.
Solana’s evolution is equally instructive. Its focus on high-performance execution through the Firedancer validator and the Alpenglow upgrade offers a glimpse of what real-time global markets may look like. Solana is already processing hundreds of millions of daily transactions at negligible cost, and its ecosystem has expanded far beyond early consumer and NFT experiments into payments, stablecoins, tokenization, and institutional DeFi. This is where execution is heading.
At the same time, 2025 marked the rise of corporate-backed L1s built specifically for institutional needs. Circle’s launch of Arc, a stablecoin-native L1, and Stripe and Paradigm’s debut of Tempo, a payments-focused blockchain now live on public testnet, show how deeply some traditional firms now appreciate the power of programmable settlement infrastructure. This is where institutional strategy is heading.
L1s are delivering the scale, speed, and reliability necessary for production-grade financial infrastructure. In my mind, the infrastructure phase is largely complete, and the base layers are earning institutional trust. In the coming year, we will see applications, financial logic, and products adopt blockchains and expand usage. Indeed, we are already seeing this trend emerge in fintech, onchain payments, and tokenized markets that are beginning to operate at commercial scale.
Stablecoins & Tokenization: A Programmable Financial Layer
When the base layer becomes institutional-grade, financial primitives can migrate next. Tokenized assets that live on these blockchains could underpin a new age of financial services that are better, faster, and cheaper than incumbent offerings and provide financial inclusion and capital efficiency.
The scale of what stands to be disrupted is enormous. Currently, trillions of dollars in assets and transaction flows sit across banks, card networks, exchanges, payments, and consumer fintechs whose economics are constrained by legacy financial rails. Stablecoins and tokenized assets can reorder that market cap.
From saving to sending to spending, stablecoins are becoming the internet’s native dollar. They give anyone in the world access to U.S. dollars without needing a USD bank account. They collapse cross-border transfer costs and settlement times from days to seconds. They allow businesses to accept and move value efficiently. For these reasons, they are quietly becoming a consumer payment instrument: stablecoin volumes exceeded $10 trillion over the last twelve months, nearly doubling year-over-year, and Visa reported a 4× increase in blockchain-based stablecoin spending on its cards. The several major payments firms have made their decision: Visa, Mastercard, Stripe, Shopify, and Fiserv are integrating stablecoin rails, to adapt to the new world.
But the story doesn’t stop at tokenized cash. If stablecoins are the first wave of disruption, tokenized assets will be the tidal shift that reshapes asset management. Tokenized U.S. Treasuries have grown 6× year over year. Robinhood and Coinbase have announced tokenized stock trading. NASDAQ has filed proposed rule changes with the SEC to allow the trading of tokenized stocks and ETFs on its exchange beginning in 2026, enabling tokenized securities to trade in the same order book with the same execution priority and shareholder rights. We are witnessing the beginning of a world where markets are 24/7, programmable, globally accessible, and reconciled in real time.
As referenced above, I was incredibly proud that Galaxy tokenized our GLXY Class A Common Stock on Solana, the first time a Nasdaq-listed U.S. equity has ever been represented natively on a major public blockchain. These are actual shares onchain (not wrappers), and our pioneering effort proves that regulated U.S. equities can operate natively on open public blockchains. We expect additional regulatory clarity in 2026 to expand the utility and adoption of tokenized equities.
This is the programmable financial layer taking shape. Stablecoins rewriting payments. Tokenization rewriting markets. Both enabling capital to move with the same speed and flexibility as information on the internet.
Business Positioning for 2026
As I look ahead, it’s clear that crypto is no longer fringe. Large banks and asset managers are no longer running pilot programs; they are actively redesigning operating models to support onchain assets at scale. While the timing and final shape of U.S. market structure legislation remain uncertain, continued legislative engagement signals a growing recognition of crypto’s role within the financial system. Over time, a workable regulatory framework could enable the crypto industry to expand into new areas of the onchain frontier, while traditional financial services players would simultaneously race to integrate and scale crypto products, services, and infrastructure into their business. We will offer products for both opportunity sets. Indeed, Galaxy was created to live and operate at the center of the great convergence.
Our liquid franchise, in addition to our Liquid Crypto Fund and our ETF franchise, will be bolstered by the imminent launch of the Galaxy Fintech Fund. Our Interactive team pushes into the frontier of AI, where the agentic economy and digital assets naturally intersect. Our Ventures team remains anchored in the core themes of tokenization, payments, and stablecoins, while also having introduced Galaxy Onchain Credit Fund in 2025. This strategy marks the horizontal expansion of Galaxy Ventures from an early-stage, crypto venture franchise into a unique, multifaceted, and more sophisticated deployer of capital. It brings to market a differentiated, commingled, onchain credit fund designed to support portfolio companies with bespoke credit solutions while seeking to source alpha from tomorrow’s credit markets for Limited Partners.
Through the Galaxy Onchain Credit Fund, we are providing early-stage liquidity to emerging blockchain networks and applications at critical moments in their lifecycle, while capturing equity-like upside through token economics. By capitalizing on opportunities with credit-like downside protection and equity-like upside convexity, we are helping solve the cold-start problem facing new onchain applications while positioning investors to participate in the growth of onchain economy.
Across each of these strategies, we believe the future of finance is being rebuilt on programmable assets and intelligent systems. We believe blockchains, AI, and next-generation infrastructure are not disparate trends but interlocking components of a single transformation. GAM’s near-decade operating expertise, breadth of platform, and institutional discipline position us to lead as this convergence comes to define the investment landscape of the next decade.
Thank you for your continued partnership and trust.
Sincerely,
Steve Kurz
Global Co-Head, Digital Assets
Galaxy
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