How To Fix Crypto's Token Problem: Inside the Manipulation and the Path Forward

The cryptocurrency industry has long grappled with a fundamental tension: the promise of permissionless, democratized finance versus the reality of insider-dominated markets that systematically extract value from retail participants. In a revealing conversation on the Lightspeed podcast, venture capitalist Mike Dudas of 6MV laid bare the mechanics of token market manipulation and offered a compelling vision for how the ecosystem might finally mature beyond its current dysfunction.

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The discussion comes at a pivotal moment for the industry. The spring of 2025 saw unprecedented scrutiny of questionable token launches, with high-profile scandals like Movement Labs bringing renewed attention to the shadowy practices that have become endemic to crypto markets. For Solana and its growing ecosystem of legitimate applications, the conversation raises crucial questions about how quality projects can distinguish themselves in a market flooded with tokens designed primarily to enrich insiders.

The Anatomy of Token Market Manipulation

The playbook that has dominated crypto token launches for the past three to four years follows a depressingly predictable pattern. Projects launch tokens at very low float and artificially high fully diluted valuations (FDV), creating conditions ripe for manipulation. This structure serves the interests of early participants while systematically disadvantaging retail investors who enter the market later.

"These types of entities, companies, protocols that have been funded already have cap tables constructed of the people who tend to do the playbook," Dudas explained. "Launch something at a really low float at a high FDV. And then, hey, I'm going to go OTC and sell my stake at a quote unquote big discount, but you know, that 50, 60% haircut. That is just absolute found money."

The mathematics of this scheme are particularly pernicious. When insiders sell their tokens at what appears to be a substantial discount—say 50 or 60 percent below market price—they are actually realizing enormous gains because the market price itself has been artificially inflated. The discount is meaningless when the baseline valuation bears no relationship to fundamental value.

This manipulation is not accidental but rather the result of carefully structured incentive systems that align the interests of teams, early investors, and market makers against those of retail participants. The system has been refined over multiple market cycles and represents a significant barrier to the industry's maturation.

The Market Maker Problem

Central to the manipulation of token markets is the role of market makers, whose ostensible function is to provide liquidity and facilitate orderly trading. In healthy markets, market makers profit from the bid-ask spread while maintaining neutral positions. In crypto, however, the relationship between projects and market makers has become deeply corrupted.

"The reason they're trading there is because there's incentives in place, often with market makers where they have options on tokens or sort of side deals, that means that they're actually not incentivized to do their core job, which is making both sides of a market," Dudas revealed.

These arrangements transform market makers from neutral facilitators into active participants in price manipulation. When market makers hold options on tokens or have other side arrangements with projects, their incentive shifts from maintaining fair markets to pushing prices higher. This creates a situation where the very entities that should be ensuring market integrity are instead the primary agents of its corruption.

The opacity of these arrangements compounds the problem. Retail traders entering a market have no way of knowing what deals exist between a project and its market makers, making informed investment decisions effectively impossible. This information asymmetry is not a bug but a feature of the current system, deliberately maintained to protect insider advantages.

Exchange Incentives and the Cycle of Manipulation

The problems extend beyond projects and market makers to the exchanges themselves, which have their own reasons to perpetuate high valuations and trading volumes. As Dudas pointed out, exchanges typically earn percentage-based fees on trading volume, creating a direct financial incentive to support inflated markets.

"The exchanges have an incentive to have really significant trading volume and high valuations as well. They take percentage-based fees typically on total volume. So the higher the price and the overall market cap or FDV, these assets, the more fees they're making given the same number of tokens changing hands."

This creates a self-reinforcing cycle where exchanges benefit from listing tokens at high valuations, market makers benefit from maintaining those valuations, and projects benefit from the ability to sell tokens at inflated prices. The only losers in this arrangement are retail participants, who ultimately provide the liquidity that allows insiders to exit their positions.

The exchange incentive structure also helps explain why so many obviously problematic tokens continue to receive prominent listings and marketing support. The short-term revenue from high-volume trading outweighs any reputational damage from association with questionable projects, at least until regulatory pressure forces a recalculation.

The Capital Misallocation Crisis

Perhaps the most damaging long-term consequence of token manipulation is the systematic misallocation of capital it produces. When the most profitable path for projects is to optimize for token price manipulation rather than product development, resources flow toward schemes rather than innovation.

"It's cynical and it leads to misallocation capital because it's a playbook that has worked for these insiders for three to four years," Dudas observed. "Where the capital misallocation comes is one on the retail side because they're getting hyped and marketed these really high valued super hot things that really aren't that valuable."

This misallocation operates on multiple levels. Retail investors lose money directly when manipulated tokens eventually collapse to reflect their true value. But the damage extends further, as venture funds that have been rewarded for backing manipulation-focused projects continue to deploy capital toward similar schemes rather than legitimate innovation.

The result is an ecosystem where the projects that succeed financially are not necessarily those building real value. This creates a negative selection effect where talented builders may be drawn toward schemes rather than substance, or leave the industry entirely out of frustration with its dysfunction.

The Overhang of Funded Junk

Looking forward, Dudas offered a sobering assessment of what the market can expect in the near term. The projects funded during the bull market of 2022-2024, many of which were designed with token manipulation in mind, will continue launching over the next year or more.

"Unfortunately, I do think based on what's been funded since 2022, we're going to see a bunch of junk come to the market in the next 12 months. And I'll be out there on Twitter telling you to the best of my ability what some of that junk is. And that overhang just has to go through."

This overhang represents a significant headwind for the industry's credibility. Each failed or fraudulent token launch reinforces the perception that crypto is primarily a vehicle for insider enrichment rather than genuine innovation. For legitimate projects building on Solana and other platforms, this creates an ongoing challenge of differentiation.

The silver lining, however, is that the private market appears to be adjusting. Dudas noted that fewer problematic deals are getting funded in the current environment, suggesting that the ecosystem may be beginning its long-overdue correction. If this trend continues, the quality of tokens coming to market should improve substantially in the two to four year timeframe.

The Hyperliquid Model: A Better Way Forward

Amidst the criticism of manipulated token launches, Dudas highlighted Hyperliquid as an example of how projects can succeed without relying on the traditional playbook. By taking no venture money and conducting a broad-based launch that included actual users through airdrops, Hyperliquid demonstrated an alternative model.

"It's not just the venture market that impacts venture backed projects, it impacts what goes out like Hyperliquid took no venture money. And so as you see more successful models without venture money, broader launches, including the actual users in airdrops and then incentivizing them through productive uses of the token buybacks, fee discounts, things like that. We're going to get a healthier ecosystem."

The Hyperliquid model addresses several of the core problems with traditional token launches. By excluding venture capital, the project eliminated the concentrated early holders who typically drive OTC selling and market manipulation. By distributing tokens to actual users, it created a broader and more aligned holder base. And by incorporating productive uses for the token—buybacks, fee discounts—it tied token value to actual utility rather than speculation.

This model is not without its own challenges. Not every project can bootstrap without venture funding, and broad distribution can create its own coordination problems. But as a template for what healthier token launches might look like, Hyperliquid offers valuable lessons for the industry.

The Case for Disclosure and Transparency

When asked about potential solutions, the conversation turned to what might be described as low-hanging fruit—simple transparency measures that could significantly improve market integrity without requiring fundamental restructuring of the industry.

"It feels like there's just low hanging fruit you could do to make the liquid token market not such a total mess. Things like disclosing your market makers and there's stuff like that you could do."

Mandatory disclosure of market maker arrangements would represent a significant step forward. If retail participants could see what deals exist between projects and their market makers, they could factor that information into their investment decisions. Tokens with particularly egregious arrangements would face market discipline rather than operating in the shadows.

Other transparency measures could include mandatory disclosure of insider selling, real-time reporting of OTC transactions, and standardized reporting of token distribution and vesting schedules. None of these measures would prevent manipulation entirely, but they would make it significantly more difficult and costly to perpetuate.

The challenge, of course, is implementation. In a decentralized ecosystem, there is no central authority to mandate disclosure requirements. Industry self-regulation has historically been ineffective, and government regulation risks stifling legitimate innovation along with manipulation. Finding the right balance will require ongoing experimentation and adjustment.

The M&A and IPO Path to Healthier Markets

A key insight from the discussion was the role that the lack of alternative exit paths has played in driving token manipulation. When the only way for investors to realize gains is through token launches, even projects that don't need tokens are incentivized to launch them.

"In 2023, 2024, one of the big issues with crypto VC was it was very hard to actually book gains on your investment outside of a token launch. And this led to a lot of projects in my view launching tokens that didn't need tokens, and that ends up being bad for the retail investors that are buying these things often."

This dynamic created adverse selection in the token market. Tokens were not being launched because they served a genuine purpose in protocol governance or user incentivization, but simply because launching a token was the most efficient way to generate returns for early investors. The result was an endless parade of tokens with no real utility beyond providing an exit vehicle.

The development of a more robust M&A and IPO market could help address this problem by providing alternative exit paths for investors. If projects could be acquired or go public without launching tokens, the pressure to tokenize everything would be reduced, and tokens that did launch would more likely reflect genuine utility.

The Rise of Strategic Acquirers

Recent developments suggest that the M&A market for crypto companies may finally be maturing. Dudas pointed to several high-profile moves by established players as harbingers of increased acquisition activity.

"You're seeing the absolute best fintechs in the world start to seriously expand into blockchains and permissionless networks. Robinhood mainly still in the trading side, but I think you're going to start to see them working on tokenized assets and the actual form factor of what people are buying as well. And then Stripe has moved from just building better networks and money movements to purchasing Privy and looking at financial accounts now."

These acquisitions by major fintech players represent a significant shift in the landscape. When companies like Robinhood and Stripe are actively acquiring crypto startups, it creates new exit paths that don't require token launches. This should reduce the pressure to tokenize inappropriately while also bringing more disciplined valuation practices to the industry.

The presence of strategic acquirers also tends to improve market discipline more broadly. Companies that might be acquisition targets have incentives to build real revenue and products rather than optimizing for token manipulation, since potential acquirers will conduct thorough due diligence and value companies based on fundamentals rather than speculative metrics.

Regulatory Tailwinds and Market Structure

The regulatory environment in the United States appears to be shifting in ways that could support healthier crypto markets. Dudas highlighted upcoming legislation as potentially transformative for the industry's structure.

"The biggest reason a lot of this has been happening in equity not being valued is there were so many headwinds to equity-only regulated crypto businesses under the last US administration, under the UK laws that still exist. But some of these laws, so the US is now passing on the cusp of passing the Genius Act, like a stablecoin bill. Looking at a market structure bill, hopefully that'll pass later this year."

Clear regulatory frameworks for stablecoins and broader market structure could attract institutional capital that has remained on the sidelines due to regulatory uncertainty. As regulated businesses enter the market, they bring expectations around disclosure, governance, and market conduct that could help raise standards across the industry.

The passage of the Genius Act stablecoin bill would provide clarity for one of crypto's most successful use cases, potentially accelerating adoption and legitimizing the industry in the eyes of mainstream financial institutions. A comprehensive market structure bill could go even further, establishing clear rules for token offerings that balance investor protection with innovation.

The Value of Equity Markets

A striking aspect of the current market dysfunction is how it has devalued equity as an investment vehicle in crypto. When tokens can be launched and traded at massive premiums to any plausible fundamental value, equity ownership can seem like a poor alternative.

"What that means is equity is valuable again. And so that's great because not everybody can invest in tokens, wants to invest in tokens. And when you have equity, who are natural buyers have a preference for revenue generating and profit generating companies. Of course, they're valuing real things."

The revaluation of equity matters because equity investors bring different expectations and incentive structures to the market. Institutional equity investors typically focus on revenue, margins, and sustainable competitive advantages rather than speculative potential. Their participation tends to reward companies that build lasting value rather than those that optimize for token price manipulation.

Circle's recent IPO represents a significant milestone in this regard. While the valuation reflects some premium for exposure to crypto themes, the company's listing demonstrates that there is substantial appetite in public markets for equity exposure to legitimate crypto businesses. This creates a template that other companies can follow, further reducing the pressure to launch tokens as the primary exit vehicle.

Treasury Companies and the Evolution of Crypto Exposure

An interesting development in the public markets has been the emergence of treasury companies that hold crypto assets as their primary business model. While these vehicles have proliferated rapidly, Dudas suggested they will need to evolve to remain relevant.

"What I think is going to happen there is that you can only have so many MeToo copycat treasury vehicles, Bitcoin, Ethereum ones and Solana ones. I do think you're going to see those companies start to use their treasuries as well for M&A. So they become more productive companies."

The evolution of treasury companies could provide another avenue for healthy market development. As these entities move beyond simply holding assets to actively participating in the ecosystem—running validators, making acquisitions, building products—they create additional demand for legitimate crypto businesses and additional exit paths for founders and investors.

Sol Strategies was highlighted as an example of a treasury company that is already moving in this direction. Rather than simply holding Solana tokens, the company is making validator acquisitions and becoming active in the governance space. This model of productive participation is more sustainable than passive holding and contributes more meaningfully to ecosystem development.

World Liberty Financial and the Path to Utility

The discussion also touched on World Liberty Financial as an example of how crypto entities can evolve from treasury-like structures toward genuine utility. What began looking like a simple asset accumulation strategy has developed into something more ambitious.

"Basically it sort of started out looking a little bit like a treasury company, just buying, buying assets up. But now, you know, with the issuance of their own stable coin, you just do one, you can sort of start to see them branching out into real productive, useful products for consumers versus just holding assets."

This evolution from holding to building represents a maturation pattern that could become more common as the industry develops. Treasury companies that establish credibility through responsible asset management may be well-positioned to launch their own products and services, leveraging their balance sheets to bootstrap new offerings.

The stablecoin issuance by World Liberty Financial is particularly noteworthy in the context of the broader regulatory developments around stablecoins. As clear regulatory frameworks emerge, we may see more entities moving into the stablecoin space, creating competition and potentially improving offerings for end users.

Solana's Position in the Evolving Landscape

Throughout the discussion, Solana emerged as a blockchain well-positioned to benefit from the industry's maturation. The network's growing ecosystem of applications, combined with its technical capabilities, makes it an attractive platform for projects focused on building real utility rather than speculative tokens.

The existence of sophisticated treasury companies like Sol Strategies focused specifically on Solana signals institutional confidence in the network's long-term prospects. Similarly, the presence of legitimate revenue-generating applications on Solana provides templates for other projects to follow, demonstrating that it's possible to build successful crypto businesses without relying on token manipulation.

As the industry moves toward healthier market structures, platforms that have attracted quality applications and builders should see disproportionate benefits. Solana's focus on scalability and user experience makes it particularly well-suited for applications that need to serve mainstream users rather than just crypto-native speculators.

The Role of Permissionless Networks

Despite the extensive criticism of token manipulation, Dudas was careful to note that some level of bad actor activity is inherent to permissionless systems. This represents both a feature and a bug of decentralized networks.

"You're always going to have scams in crypto. These are permissionless networks or many of them are. We won't get into the L2 debate and levels of decentralization."

The permissionless nature of crypto networks is what makes them valuable—anyone can build, anyone can participate, no central authority can arbitrarily exclude participants. But this same openness creates opportunities for bad actors that wouldn't exist in more controlled environments.

The challenge for the industry is to develop mechanisms that discourage manipulation without sacrificing the permissionless qualities that make crypto valuable. This likely requires a combination of social coordination (calling out bad actors), market mechanisms (rewarding quality projects), and carefully designed regulation that targets the worst abuses without stifling innovation.

The Long Road to Market Maturity

A recurring theme throughout the conversation was that improving crypto markets is a gradual process that will take years rather than months. The problems that have developed over multiple market cycles cannot be solved overnight, even with the best intentions.

"It just takes time," Dudas emphasized when discussing the path to healthier markets.

This perspective is both realistic and somewhat encouraging. While the near-term outlook includes an overhang of problematic tokens coming to market, the longer-term trajectory appears to be toward greater legitimacy and healthier market structures. The key is for participants to maintain their commitment to building real value even when short-term incentives might favor manipulation.

For Solana and its ecosystem, this extended timeline suggests the importance of continued focus on quality application development and community building. Projects that establish strong track records during the cleanup period will be well-positioned when markets become more discriminating.

Practical Steps Toward Better Markets

Beyond the macro-level changes in market structure, there are practical steps that individual participants can take to support healthier crypto markets. Investors can do due diligence on market maker arrangements before investing. Projects can commit to transparent disclosure even when not required. Exchanges can implement stricter listing standards that consider market structure risk.

The information asymmetry that enables much token manipulation is not immutable. It persists because participants have not demanded better information. As awareness grows and expectations change, the pressure for transparency should increase.

The journalism and analysis that has begun to expose questionable token launches and market maker arrangements represents an important check on manipulation. The more that information about problematic practices becomes public, the harder it becomes for bad actors to operate in the shadows.

The Inevitability of Change

Looking at the current state of crypto markets, it's easy to feel pessimistic about the industry's prospects. The manipulation described in the conversation is so pervasive and profitable for insiders that fundamental change might seem impossible.

But the factors driving change are substantial and growing. Regulatory clarity is emerging. Major fintech players are entering the market with different expectations. Public market alternatives are developing. And perhaps most importantly, a generation of crypto builders has learned hard lessons about what doesn't work and is ready to try something different.

The Hyperliquid example demonstrates that projects can succeed without relying on manipulation. As more projects follow this template and demonstrate its viability, the playbook that has dominated for the past several years should become less attractive to both projects and investors.

Implications for Retail Participants

For retail participants in crypto markets, the conversation offers both warnings and reasons for cautious optimism. In the near term, the overhang of problematic tokens suggests continued caution is warranted. The projects launching over the next year were largely funded with manipulation in mind, and many will likely follow the familiar pattern of high launches followed by sustained decline.

However, the longer-term trajectory toward healthier markets should eventually benefit retail participants. As equity markets develop, institutional standards improve, and regulatory clarity emerges, the worst forms of manipulation should become more difficult to sustain. Markets that actually reward fundamental value creation would be much more friendly environments for retail investors.

In the meantime, focusing on projects with real revenue, transparent governance, and aligned incentives remains the best approach. The Solana ecosystem's emphasis on practical applications over speculative tokens makes it a relatively attractive environment for this kind of fundamental-focused investing.

Conclusion: The Difficult but Necessary Path Forward

The crypto industry stands at an inflection point. The practices that have made insiders wealthy while extracting value from retail participants cannot continue indefinitely. Whether through regulatory intervention, market evolution, or simple exhaustion, the current model of token launches will eventually change.

The conversation with Mike Dudas outlined both the depth of the current problems and the pathways toward resolution. Better disclosure requirements, developing M&A markets, regulatory clarity, and alternative exit paths for investors could all contribute to healthier market structures. But none of these changes will happen automatically—they require sustained effort from participants who believe the industry can do better.

For Solana and its ecosystem, the opportunity is to lead by example. By continuing to attract quality projects that focus on real utility and sustainable business models, Solana can demonstrate that there's a better path forward for crypto. As the industry matures, platforms that have prioritized substance over speculation should be rewarded.

The cleanup will take time, and there will be more failures and scandals along the way. But the direction of travel appears to be toward greater legitimacy, and that should give everyone in the ecosystem reason for cautious optimism.

Facts + Figures

• Market Maker Manipulation: Market makers often receive options on tokens or side deals that incentivize them to push prices higher rather than maintain neutral, two-sided markets as their function supposedly requires.

• OTC Selling Dynamics: Insiders sell tokens OTC at 50-60% "discounts" to market price, but these discounts represent substantial profits because market prices are artificially inflated.

• Exchange Incentives: Exchanges earn percentage-based fees on trading volume, creating direct financial incentives to support high token valuations regardless of fundamental merit.

• 12-Month Junk Overhang: Projects funded since 2022 that were designed for token manipulation will continue launching over the next 12 months, creating ongoing headwinds for market credibility.

• Hyperliquid Model: Hyperliquid took no venture money and conducted a broad-based launch including actual users in airdrops, demonstrating an alternative to the manipulated token launch playbook.

• Genius Act Progress: The US is on the cusp of passing the Genius Act, a stablecoin bill, with a market structure bill potentially following later in 2025.

• Circle IPO: Circle has gone public, demonstrating substantial appetite in public markets for equity exposure to legitimate crypto businesses.

• Stripe's Crypto Expansion: Stripe purchased Privy and is expanding beyond money movement into financial accounts and blockchain integration.

• Robinhood's Direction: Robinhood is expected to expand from trading into tokenized assets and the actual form factor of digital asset ownership.

• Sol Strategies Active Involvement: Sol Strategies is described as making validator acquisitions and becoming active in Solana governance, going beyond passive treasury holding.

• World Liberty Financial Evolution: World Liberty Financial has evolved from asset accumulation to issuing its own stablecoin, demonstrating progression toward productive utility.

• Private Market Adjustment: Fewer problematic deals are getting funded in the current environment, suggesting early-stage markets are beginning to self-correct.

• Low Float Launch Strategy: The standard manipulation playbook involves launching tokens at very low float and artificially high fully diluted valuations (FDV).

• 2-4 Year Timeline: Dudas expressed optimism that healthier tokens should come to market in the two to four year timeframe if current trends continue.

• Treasury Company Evolution: Treasury companies holding Bitcoin, Ethereum, and Solana are expected to use their treasuries for M&A to become more productive businesses.

Questions Answered

What is the standard playbook for manipulating crypto token launches?

Projects launch tokens at very low float and artificially high fully diluted valuations, creating conditions where insiders can profit through various mechanisms. Market makers receive options or side deals that incentivize them to maintain high prices rather than make both sides of the market fairly. Teams and investors then sell their allocations through OTC deals at "discounts" of 50-60% that still represent massive profits given the inflated baseline valuations. Exchanges benefit from percentage-based fees on high volume trading, so they have incentives to list and promote these tokens. This playbook has worked for insiders for three to four years and systematically extracts value from retail participants.

Why do so many crypto projects launch tokens even when they don't need them?

The primary driver is the lack of alternative exit paths for investors. During 2023-2024, it was very difficult for venture investors to book gains outside of token launches, which led to projects launching tokens that served no genuine utility beyond providing investor liquidity. When the only way to realize returns is through tokenization, even projects that would be better served by traditional equity structures end up launching tokens. This creates adverse selection where the token market becomes flooded with offerings designed for investor exits rather than genuine protocol utility, ultimately harming retail investors who purchase these tokens.

How can the crypto industry move toward healthier token markets?

Several mechanisms could improve market health. Simple transparency measures like mandatory disclosure of market maker arrangements would help retail investors make informed decisions. The development of more robust M&A and IPO markets would provide alternative exit paths, reducing pressure to tokenize inappropriately. Regulatory clarity from legislation like the Genius Act stablecoin bill and potential market structure bills would attract institutional capital with higher standards. Alternative launch models like Hyperliquid's venture-free, broad-based distribution demonstrate that projects can succeed without manipulation. The combination of these factors should gradually improve market quality over a two to four year timeframe.

What role do exchanges play in token manipulation?

Exchanges have direct financial incentives to support high token valuations and trading volumes because they typically earn percentage-based fees on total volume. The higher the price and market cap of listed assets, the more fees exchanges generate for the same number of tokens changing hands. This creates a situation where exchanges benefit from listing tokens at inflated valuations and may provide marketing support for questionable projects because the short-term revenue from high-volume trading outweighs reputational concerns. This alignment with manipulator interests makes exchanges complicit in the broader system of retail value extraction.

What does Hyperliquid's success demonstrate about alternative token launch models?

Hyperliquid proved that projects can achieve major success without venture capital funding and without relying on the manipulated token launch playbook. By taking no venture money, Hyperliquid eliminated the concentrated early holders who typically drive OTC selling and manipulation. By distributing tokens to actual users through airdrops and incorporating productive token uses like buybacks and fee discounts, the project created genuine utility and a more aligned holder base. This model suggests that projects focused on building real value can compete with and potentially outperform those relying on manipulation.

How might increased M&A activity improve crypto markets?

The emergence of strategic acquirers like Robinhood and Stripe in the crypto space creates alternative exit paths for investors and founders that don't require token launches. When projects can be acquired by established fintech players, the pressure to tokenize everything decreases, and tokens that do launch should more likely reflect genuine utility. Strategic acquirers also bring disciplined valuation practices based on revenue and fundamentals rather than speculative metrics, which tends to reward companies building lasting value. The recent Circle IPO and Stripe's acquisition of Privy represent early examples of this healthier market structure developing.

What should retail investors expect from crypto markets over the next 12 months?

The near-term outlook includes significant challenges from the overhang of projects funded since 2022 that were designed with token manipulation in mind. These tokens will continue launching over the next year, and many will likely follow the pattern of high launches followed by sustained declines as insiders exit their positions. Mike Dudas committed to using his platform to identify problematic tokens as they launch. However, the longer-term trajectory appears more positive as private market adjustments reduce funding for manipulation-focused projects and alternative market structures develop.

How are treasury companies expected to evolve?

Pure treasury companies that simply hold Bitcoin, Ethereum, or Solana assets face increasing competition from copycat vehicles. To remain relevant, these companies are expected to evolve toward more productive use of their assets, including using treasuries for M&A activity. Sol Strategies represents an example of this evolution, moving beyond passive Solana holding to make validator acquisitions and participate actively in network governance. World Liberty Financial demonstrates another evolution pattern, progressing from asset accumulation to issuing its own stablecoin and building consumer-facing products.

What regulatory developments could improve crypto market structure?

The US is on the cusp of passing the Genius Act, a stablecoin bill that would provide clear regulatory frameworks for one of crypto's most successful use cases. A comprehensive market structure bill is expected to follow later in 2025, potentially establishing clear rules for token offerings that balance investor protection with innovation. These regulatory developments should attract institutional capital that has remained on the sidelines due to uncertainty, and the entry of regulated businesses should help raise standards across the industry through their expectations around disclosure, governance, and market conduct.