Two weeks of strong performance have broken the crab market. The familiar liquidity channels are seeing inflows again, ETF flows are turning positive, stablecoin issuance is stabilizing... The obvious question on everybody’s mind now is whether this is the start of the next bull run.

Every previous bull market has always been accelerated by new liquidity channels like ICOs, stablecoins, ETFs and DATs. These new channels drew in fresh, pent-up capital that poured into and recycled across the entire crypto market, driving total market cap higher.

As we stare a potentially new bull market in the face, the question is which channel will deliver that pent-up liquidity this time? We believe RWAs are a top contender.

Every cycle starts with a fresh channel

Bull markets are shaped by liquidity, and that liquidity needs a way in. Crypto has never participated in a global liquidity regime just because the money existed. It participates when a fresh channel, with enough excitement around it, pulls that liquidity into the asset class.

In the past, channels like stablecoins, ETFs and DATs emerged, bringing one-way capital flows that drove a market repricing before eventually normalizing into everyday plumbing that moved liquidity out as easily as in.

Today, ETFs and DATs, the most recent channels, have fully normalized. The market is waiting for something new to drive the next bull market.

Over each bull market, a different channel grows, peaks and normalizes into the cycle reset:

• VC & ICO ('17/18) - Fund capital and token sales carried the first institutional-scale money in.
• Stablecoins ('20/21) - Over $120bn of net issuance in a single year built the on-chain dollar base that funded DeFi and the alt cycle.
• ETFs and DATs ('24/25) - $63bn of ETF net flows and $115bn+ of treasury accumulation repriced the majors, and little else.

In Exhibit 1, the dashed line is the fifth channel forming. While RWA net growth is still small against prior channel peaks, it is the only line rising while every other channel rolls over. The rest of this piece examines why we think it can become the next meaningful channel..

We need new channels

Channel inflow dries up every bear market. As Exhibit 2 shows, one channel does most of the carrying in each cycle, with aggregate inflow peaking alongside it at 12% of market cap in 2021 and 10% in 2025.

When that channel normalizes, inflow collapses toward zero. At the recent trough, aggregate inflow sat at 2.4% of market cap. ETF flows turned net negative, much of the DAT cohort traded near or below NAV, stripping out the financial-leverage appeal, and stablecoin supply underwent its steepest contraction since the Terra collapse. The past two weeks have lifted those flows off the floor, but they remain a fraction of what prior cycles ran on.

The collapse is normal. In past resets, the next channel was already scaling while the old one faded. This time the forming channel is still an order of magnitude too small to carry the load. Whether it gets there will decide the cycle.

More than a trend

RWA are usually framed as the story of bringing assets on-chain. We think they are equally about bringing liquidity in. On-chain tokenized value has roughly tripled in a year to the low-$30bns, and continued to grow through the same months in which the stablecoin base shrank. The barrier between tokenized and crypto-native assets is thinning as capital moves more freely between the two.

Today, tokenized stocks, tokenized funds and crypto assets increasingly sit in the same wallet and settle in the same stablecoins (which is the mechanism of exchange). That fungibility turns tokenization from an asset migration into a liquidity channel, and we think it could become the conduit of the next cycle.

A different kind of channel

The difference with prior cycles sits in how the capital arrives. Each earlier channel delivered a buyer for a specific asset. VC and ICO capital bid new tokens, stablecoins bid DeFi and the alt complex and ETFs/DATs bid majors and blue-chip alts.

Tokenization is different. The money buys Apple, or a Treasury fund, not a crypto asset. But it now sits on-chain, and as a result, moving that capital into BTC or alts becomes significantly easier.

Previous channels pushed capital into specific assets, while tokenization places fresh capital inside the system, after which it can be allocated more freely. The near-term impact will be quieter than launch-day ETF inflows. ver time, however, that balance sheet gets deployed across the ecosystem, while the friction of doing so continues to fall as the connecting infrastructure matures

Why it has not spilled over yet

RWAs drew in roughly $16bn over the past twelve months, around a tenth of what ETFs and DATs combined carried in during their best twelve months last cycle. The channel is still in its ramp phase.

As Exhibit 3 shows, measured from the point each channel first reached measurable scale, peak inflows arrived 20 to 60 months after opening. ETFs peaked at 20 months, stablecoins at 33, and VC and ICOs at 54. On that clock, the RWA channel is 18 months old, with trailing-12m inflow of 0.9% of market cap, ahead of DATs at the same age and just behind ETFs. Early, not failing.

To date, most tokenized assets today are cash-management products, treasuries and money market funds sitting in permissioned wrappers. The infrastructure connecting them to the rest of the system has only recently been switched on.

The catalysts for this are both regulatory and mechanical:

• Regulatory - Market-structure legislation and tokenization frameworks are widening who can hold tokenized securities and clarifying how they transfer, moving them out of closed permissioned pools.
• Mechanical - Tokenized treasuries and funds are being accepted as collateral on major venues and in DeFi, converting them from parked cash into a working balance sheet that can face the rest of the system.

Why does this matter for positioning

In 2024/25, liquidity came in through wrappers, ETFs, and DATs that held majors and blue-chip alts. BTC, ETH and a select number of alts repriced. Outside some spillover from memecoin season, driven mainly by the wealth effect of BTC and SOL outperforming, most alts only saw a bid.Anyone waiting for a broad alt season was waiting for capital that structurally could not reach them. The bull market came and went without much broad-based euphoria. Investors with a deeper understanding of the limitations in how liquidity funneled into digital assets through ETFs and DATs had an edge in understanding what would receive a bid.

Two questions matter this time:

• Where does RWA capital flow once it is on-chain, if anywhere beyond the wrappers?
• If it moves, where does that value accrue? Which assets benefit, and which settlement rails, collateral infrastructure and DeFi primitives capture the activity?

Understanding that tokenized assets are held by balance sheets and less so by traders is important. This makes it likely that liquidity and therefore any cycle driven by RWA runs cooler and longer, or at least the structural tailwind that crypto gets from it will behave in that way.

Over the past two weeks, inflows have picked up across established channels, including ETFs and stablecoin minting. That can support a recovery, but a full cycle likely needs more. Every prior bull market was powered by a new capital channel scaling alongside the rally, and RWA seems to be the only candidate currently on that path.

We are closely watching whether tokenized balance sheets start leaving these wrappers, showing up more as collateral and continue to enter DeFi, and generating flows beyond cash management to validate our thinking as the cycle resets and we enter the next bull market.