Retail investors are dead, institutions must rise: Understand the next round of global encryption bull run.

Conclusion first: The next three years will be a bull run led by institutions, representing the official full entry of crypto and Blockchain technology into Wall Street's balance sheet, with mass adoption ultimately achieved through a top-down revolution.

The mass adoption of crypto will not be the de-centralization revolution originally envisioned by Satoshi Nakamoto, but rather a top-down upgrade of global financial infrastructure.

Retail investors are the tide, institutions are the sea.

Tides may recede, but the sea does not.

Review 2025: Why is this bull run the “Year of Institutions”?

Reason placed in front: Almost all BTC/ETH funds come from institutions, while retail investors are trading memes and altcoins.

In 2025, all mainstream coins will reach new historical highs: btc 126k, eth 4953, bnb 1375, sol 295

1. ETF and Institutional Channels ( such as DAT )'s Explosion

2024-2025 ETF large inflow event

From 2024 to 2025, the net inflow of digital asset funds is $44.2 billion, while the holdings of spot BTC ETFs reach 1.1 to 1.47 million BTC (accounting for 5.7% to 7.4% of the total circulating supply)

This is the first time in history that the Bitcoin entry has been monopolized by ETFs, and retail investors did not participate in the bull run's main surge.

2. Where did the retail investors go?

Structural data from TheBlock:

• In 2025, institutional allocation to BTC/ETH will account for 67%.
• Retail investors only 37%, mainly turning to memecoins and short-term assets with no real value.

Retail investors didn't buy BTC/ETH, it was institutions that drove the BTC bull run.

3. How is a bull run formed?

First, let's look at some data:

• Exchange BTC balance drops to 6-year low: 2.45–2.83 million coins
• ETF and custody movements led to a decrease in “tradable supply” of 6.6%
• Large funds ( > 1 million USD ) account for a historic high in on-chain traffic share.

This is a typical “liquidity shock bull run”, small amount of tradable chips + continuous institutional buying = extremely strong trend.

Why will institutions fully enter the market in 2025?

First, the conclusion: regulations are in place and institutional demand is high.

The US regulation is clear, first opening the “legal institution entrance”

• Stablecoin Legislation and Regulatory Framework: Banks can use USDC/TUSD type stablecoins for settlements in compliance.
• ETF Approved: Completely opens the floodgates for pension funds and insurance companies.

The underlying changes in regulation allow institutions to legally, compliantly, and at scale enter the crypto assets.

Institutional demand far exceeds supply: Structural imbalance is widening

2020-2025 Overview of Institutional Demand and Supply for BTC, with a supply-demand reversal starting in 2024

Core data from Bitwise:

By 2025, the effective demand for BTC by institutions is approximately $976, while the actual available supply is only $12B, resulting in a supply to demand ratio of 80:1.

This means that the price can be easily raised several times without retail participation.

How will institutional funds continue to enter in the next bull run?

If the market in 2025 validates the prototype of an “institution-led bull run”, then the next three years will be the period of full explosion of this trend. To understand this, one must start from the structure of traditional financial assets itself.

Let's take a look at the total assets of traditional finance, and then check the institutional management ratio, which will allow us to estimate the magnitude of potential inflow of funds.

The distribution of assets in traditional finance determines who has the “real money”

Global investable assets scale (2024 data):

| Asset Class | Scale | | Global Real Estate (Financializable Part) | ~$330T | | Global Bond Market | ~$130T | | Global Stock Market | ~$110T | | Private Credit / Private Equity | ~$12T | | Bank Deposits and Cash Equivalents | ~$40T | | Total | >$600T |

About 70%–80% is held by institutions (pension funds, sovereign funds, insurance, banks, hedge funds, asset management companies).

Percentage of equity assets held by institutions (2017 data)

When the underlying infrastructure of crypto accommodates traditional assets worth over $400T( trillion) (for comparison, the current market cap of BTC is 1.8T), the scale of inflow is no longer that of the past tens of billions driven by retail sentiment,

Every 1% adjustment in asset allocation = Trillions of dollars in fund migration = BTC market value doubles.

This is why ETF/RWA = the core narrative of the next bull run.

long-term impact on mainstream assets

In simple terms, it is the goldification of BTC and the equityization of ETH.

BTC: Institutional Reserve Asset

• ETF holdings continue to rise, liquidity is constantly decreasing.
• Prices will become increasingly institutionalized, trend-oriented, and slow-bull.
• BTC has become the true “digital gold,” and central banks around the world have started to reserve it.

ETH: The 'equity asset' of the global on-chain economy

Unlike BTC's “commodity-like asset” (, ETH has attributes that are closer to “equity”:

• ETH inflation/deflation mix, tending towards deflation
• ETH staking rewards are the “dividends” of the on-chain economy.
• The value of ETH is positively correlated with the entire on-chain GDP
• The pricing logic of ETH comes from “network scale × usage”

The long-term value of ETH = Market value of the global on-chain economy × Tax rate model of ETH.

This is stronger than the stocks of technology giants because it is “equity at the level of financial infrastructure.”

How will the role of retail investors change fundamentally?

In simple terms, it means transforming from narrative creators into price followers (only for mainstream tracks, trading meme coins is another story), retail investors no longer create bull runs, they just take advantage of the ride.

Characteristics of an institution-led market:

• More stable trends (long-term capital)
• Emotional influence weakens
• Liquidity is thinner (buy and sell orders are dominated by whales)

So retail investors must adjust their strategies:

• From emotional trading → trading with big funds
• From finding hundredfold coins → Finding structural long-term tracks
• From short-term to cross-cycle

What are the opportunities for VC and entrepreneurs?

The most certain tracks for VC in the next three years:

1. Enterprise Blockchain

In simple terms, everyone hopes that pensions and bank deposits are not on Ethereum or Solana, so there needs to be solutions tailored to corporate needs.

Enterprise-level requirements include:

• Privacy (which public chains cannot achieve)
• Compliance (KYC, AML, etc.)
• Controllability (governance is upgradeable and revocable)
• Low cost & stable

Therefore, institutions cannot use public chains for core business, but rather utilize some enterprise-level Blockchain solutions (though it sounds like a consortium chain) such as: Hyperledger Fabric and R3 Corda.

Institutions will not run core businesses on Ethereum, but will buy BTC/ETH on ETFs, DATs, and RWAs. Assets on public chains, businesses on enterprise chains, bridged by DeFi, this is the architecture of the future.

2. Bridging + ZK (private ↔️ public)

• Cross-chain
• Cross-market
• Cross-regulatory zone/country
• Cross-asset (RWA ↔️ Public Chain Assets)

Enterprise-level Blockchain needs to communicate data with public chains, thus requiring Bridging, which is a bridge from institutional private chains to public chains. The ZK technology may be a potential technical solution; I am not an expert in this area, so I won't comment further.

3. MPC, Custody, Asset Management Tools

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

4. RWA & Settlement Layer

• National Debt
• Private Credit
• Product
• Forex
• Settlement layer (the on-chain version of the SWIFT network, this part involves payments and is very complex, it may be worth writing a separate article on this)

VCer emphasizes the key points, this is a trillion-level opportunity.

Conclusion

The next bull run is not a victory for Crypto, but a victory for Wall Street.

In the next three years, you will see:

• JPM, BlackRock (, Citi )'s on-chain scale exceeds that of most L1.
• The price influence of mainstream coins held by retail investors has dropped to a historical low.
• Tens of trillions of dollars are being put on the Blockchain through ETFs, RWAs, and enterprise chains.
• web3 has transformed from a narrative economy to a global financial infrastructure

The mass adoption of crypto has already occurred, but not as a replacement for central banks; rather, it is a revolutionary upgrade of financial infrastructure.

( Written at the end:

Retail investors are dead, institutions should stand.

Rather than fantasizing about a hundredfold coin, it is better to understand the logic of capital. The next bull run will be priced by institutions, driven by enterprises, and determined by infrastructure. Retail investors still have opportunities, but the approach has changed; understanding structural trends and positioning oneself ahead of where institutions will come.

Quoting a phrase from my favorite trader cryptocred: Don't go against the dominant trend, be a friend of the trend.

Next issue preview: How to establish a systematic long-term investment logic for BTC, ETH, and BNB, and plan ahead. Keep an eye on a frontline investor and entrepreneur, the cutting-edge retail investor https://x.com/chelsonw_, who regularly publishes the industry's leading analyses.