Dai retail AI giants: how institutional capital will shape the next Bitcoin bull market

Bitcoin has experienced a significant contraction from $126,000 to the current levels of $90.81K, a decline of 28.57%. Panic has swept the markets, liquidity reserves have been drastically reduced, and deleveraging pressure continues to exert destabilizing effects. Data from Coinglass confirms that the last quarter was characterized by a wave of forced liquidations, with a tangible reduction in overall liquidity. However, behind this bleak picture, encouraging structural signals emerge: the US SEC is preparing to launch the “Innovation Exemption” regulatory framework, the Federal Reserve is accelerating towards more frequent rate cuts, and global institutional access infrastructures are reaching operational maturity. This contradiction is at the core of today’s market: the short term appears dominated by pessimism, while long-term prospects are illuminated by opportunities. The real strategic question remains: from which capital sources will the next bullish expansion emerge?

The structural limitations of retail capital and the decline of the DAT model

The era of retail capital dominance in the speculative cycle is definitively ending. A myth that is crumbling is represented by Digital Asset Treasury companies (DAT). These publicly traded entities acquire cryptocurrencies through issuing shares and debt instruments, generating profits via active asset management strategies such as staking and lending.

The central mechanism of this model is the “capital flywheel”: as long as the company’s stock price remains above the Net Asset Value (NAV) of the cryptocurrencies held, it can issue equity at high valuations and buy crypto at lower prices, thus amplifying the managed capital. However, this system depends entirely on one condition: the premium of the shares over the NAV must persist. When the market pivots towards risk aversion—especially during sharp Bitcoin corrections—this high-beta premium compresses quickly, sometimes turning into a discount. Once the premium disappears, issuing new shares dilutes shareholder value, and the funding capacity is irrevocably exhausted.

The scale issue is even more critical. Although over 200 companies adopted DAT strategies by September 2025, holding a total of 115+ billion dollars in digital assets, this figure accounts for less than 5% of the entire crypto market. This means the aggregate purchasing power of DATs remains insufficient to sustain a large-scale bullish cycle. Even more worrying is the inverse risk: when the market faces pressure, DATs may be forced to liquidate positions to maintain operational continuity, amplifying selling pressures on an already vulnerable market.

The market thus has an urgent need to identify more robust and larger-scale capital sources.

The three capital pipelines: institutional, RWA, and infrastructure

First channel: exploratory entry of institutional capital

Spot ETFs on Bitcoin and Ethereum are now the preferred vehicle for global asset managers to allocate capital into the crypto sector. After the approval of the spot Bitcoin ETF in the US in January 2024, Hong Kong quickly followed with approvals for Bitcoin and Ethereum. This global regulatory convergence turns ETFs into a standardized channel for rapid and efficient international capital deployment.

However, ETFs are only the starting point. Even more decisive is the maturation of custody and settlement infrastructures. Institutional investors’ focus has shifted from “can we invest?” to the pragmatic question: “how to invest safely and efficiently?” Global custodians like BNY Mellon already offer custody services for digital assets. Platforms like Anchorage Digital integrate settlement-grade middleware, enabling asset managers to allocate capital without pre-funding, significantly multiplying capital efficiency.

The most promising segment involves pension funds and sovereign wealth funds. Billionaire Bill Miller has publicly stated that within the next three to five years, financial advisors will begin recommending allocations of 1-3% in Bitcoin within institutional portfolios. Although seemingly modest, for the trillions of dollars in global assets under management, even just 1-3% represents measurable shifts of hundreds of billions of dollars flowing in. The state of Indiana has already proposed enabling pension funds to invest in crypto ETFs. Sovereign investors from the United Arab Emirates have collaborated with specialized managers to launch hedge funds targeting $100 million in raise and annualized returns of 12-15%.

These institutional flows have structurally different characteristics from DAT cycles: they are predictable, established over time, and generate sustained liquidity rather than speculative.

Second channel: RWA as a bridge to trillions of dollars

Tokenization of real-world assets (RWA - Real World Assets) could be the most powerful catalyst for the next liquidity wave. RWA converts traditional assets—bonds, real estate, art—into digital tokens on blockchain. As of September 2025, the global aggregate market capitalization of tokenized RWAs was about $30.91 billion. Industry research projects that by 2030, the RWA market could expand over 50 times, with estimates ranging between 4 and 30 trillion dollars.

This scale vastly exceeds any native crypto capital pool currently existing. Why are RWAs structurally decisive? Because they solve the communication barrier between traditional finance and DeFi. Tokenized bonds and government securities allow both ecosystems to “speak the same language.” RWAs introduce stable, income-generating assets into DeFi, reducing volatility and providing institutional managers with non-native crypto income sources. Protocols like MakerDAO and Ondo Finance, integrating US Treasury bonds on-chain as collateral, have become magnets for institutional capital. The RWA integration has transformed MakerDAO into one of the leading DeFi drivers for TVL, with tens of billions of dollars in US Treasury holdings backing the generated DAI.

This phenomenon demonstrates a fundamental principle: when compliant, asset-backed yield products emerge, institutional finance is immediately ready to mobilize capital.

Third channel: settlement infrastructure as an enabling prerequisite

Regardless of the capital sources—whether from institutional allocation or RWA tokenization—efficient, low-cost settlement infrastructures remain essential prerequisites for large-scale adoption. Layer 2 solutions process transactions off the Ethereum mainnet, drastically reducing gas fees and confirmation times. Platforms like dYdX, operating via L2, offer order creation and cancellation speeds impossible on Layer 1, a crucial capability for managing high-frequency capital flows.

Stablecoins play an even more central role. According to TRM Labs data, by August 2025, the total on-chain volume of stablecoin transactions exceeded $4 trillion, with an 83% annual growth, representing 30% of all blockchain transactions. In the first half of 2025, the total market cap of stablecoins reached $166 billion, establishing themselves as a pillar of compliant cross-border payments. In Southeast Asia, over 43% of cross-border B2B payments use stablecoins.

Regulatory consolidation is crucial: authorities like the Hong Kong Monetary Authority require stablecoin issuers to maintain 100% reserves, cementing stablecoins’ status as compliant, highly liquid on-chain cash instruments, enabling institutions to execute transfers and settlement efficiently.

The capital inflow timeline: from psychological rebound to structural transformation

If these three operational pipelines materialize, how will the capital inflow unfold over time?

Short-term (end 2025 - Q1 2026): A rebound driven by policy signals. If the Federal Reserve ends quantitative tightening and accelerates rate cuts, and if the SEC implements the “Innovation Exemption” in January, the market could experience a recovery phase driven by regulatory clarity. This phase will be predominantly influenced by psychological factors: explicit regulatory signals will bring risk capital back. However, these flows remain highly speculative and volatile, with uncertain sustainability.

Medium-term (2026-2027): Gradual entry of regulated institutional capital. As global ETFs and custody infrastructures mature, liquidity will mainly come from compliant institutional pools. Even strategic allocations by pension funds and sovereign funds could generate significant multiplier effects: this capital is patient, lightly leveraged, and provides a stability base for the market, resisting both bullish euphoria and panic selling cycles typical of retail.

Long-term (2027-2030): Structural transformation driven by RWA tokenization. Massive, durable liquidity may only materialize through full RWA implementation. These assets carry value, stability, and traditional yield flows on the blockchain, with the potential to push DeFi TVL into trillions. RWAs directly connect the crypto ecosystem to global balance sheets, ensuring long-term structural growth rather than cyclical speculation. When this scenario unfolds, the crypto market will have definitively transitioned from the periphery to the mainstream of global finance.

Conclusion: from retail leverage to institutional infrastructure

The last bull cycle was fueled by retail leverage and speculative psychology. The next, if it emerges, will depend on institutions, regulatory compliance, and mature infrastructures. The market is transitioning from the periphery to the core of the global financial system: the question is no longer “can I invest?”, but “how to allocate capital safely?”.

Institutional capital will not flow suddenly, but the channels are already being built. In the next three to five years, these pipelines can gradually reach full operational capacity. At that point, the market will no longer compete for retail attention but will seek trust and allocations from institutional asset managers. It is a transition from a speculative economy to an infrastructural economy—a necessary step toward the maturity of the crypto market.