January 09, 2026
By Our Correspondent
After years of clamouring for clearer rules, big investors are finally edging into cryptocurrency markets. Yet their arrival is proving bruising for much of the industry. As institutions reprice risk and concentrate capital, decentralised finance (DeFi) tokens and smart-contract platforms have been left nursing heavy losses in 2025.
According to Jamie Coutts of Real Vision, the past year marked a reckoning rather than a rally. Bitcoin was the standout performer, while DeFi assets fell by roughly two-thirds and smart-contract blockchain tokens suffered average losses of 66%. Far from a blanket endorsement of crypto, institutional onboarding has favoured scarcity, scale and revenue over experimentation.
Capital has flowed towards networks that can demonstrate organic use and cash generation. Data from Nansen show that Tron and Solana topped the league tables in 2025, earning $576m and $585m respectively in fees and revenue. By contrast, many DeFi projects, long valued on promise rather than profit, struggled to justify their prices.
Institutions, says Nicolai Sondergaard of Nansen, remain drawn to the largest and most liquid assets. Exchange-traded funds tracking Solana continued to attract inflows, even as on-chain activity told a more muted story. Some investors rotated from Bitcoin into Ethereum, with both blockchain data and exchange figures pointing to steady accumulation by large holders.
Wall Street, meanwhile, pressed ahead regardless of the market’s gloom. Morgan Stanley filed multiple applications for crypto exchange-traded funds in 2025, including products linked to Bitcoin, Solana and, more recently, Ethereum. Regulation, at least, is no longer the binding constraint.
What comes next is contested. Optimists such as Jack Yi of Trend Research expect a recovery in the first half of 2026. Fundstrat’s Tom Lee predicts a rebound once markets establish a durable floor, though his firm also warned Ethereum could sink to around $1,800 in early 2026. Others argue the pain was necessary. Lacie Zhang of Bitget Wallet says excess leverage from 2024 has been flushed out, leaving valuations palatable for cautious institutions.
If regulation continues to firm up and ETFs proliferate, 2026 may mark a shift from brutal repricing to slow accumulation. But the lesson of 2025 is already clear: institutional adoption does not lift all boats. It rewards a select few—and leaves the rest to sink or swim.
