Crypto’s Wall Street era arrives as retail buzz, liquidity fade

Gracy Chen doesn’t want to run just a crypto exchange any more.

The chief executive of Bitget – the sixth-biggest exchange by trading volume, per tracker CoinMarketCap – says institutional clients increasingly want to trade stocks, commodities and crypto together, use equities as collateral, and keep more of their assets on a single platform.

But there is another reason she is pushing beyond digital tokens: She thinks the old crypto trading business is getting worse.

“For nearly a year now, liquidity is not coming back, and I don’t see it coming back,” the Hong Kong-based Chen said. “That’s why we don’t want to be just a crypto exchange. I don’t want to just compete with Binance – we also consider Robinhood more of our peer.”

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The contradiction is becoming harder to miss: Crypto is enjoying perhaps its deepest institutional embrace yet while crypto natives are going the other way. Banks are putting assets and financial products on blockchains, institutional trading desks are taking a larger role and regulatory barriers have fallen.

Yet three crypto exchanges, including BitMEX, went out of business this summer. And Chen says liquidity in altcoins has fallen sharply and the downturn increasingly reminds her of 2022.

“That’s the reality we’ve seen. In 2026, it does feel like 2022,” Chen said, referring to the year when a slew of crypto lenders and crypto exchange FTX collapsed. “I feel the worst part of 2026 is probably not there yet. Things could be even worse.”

Challenging the Wall Street crypto thesis

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That challenges one of the assumptions behind crypto’s long-awaited institutional era: that getting Wall Street into digital assets would necessarily mean more money and liquidity spreading across the market.

Instead, institutions may be helping create a different kind of crypto market, concentrated in fewer assets and increasingly built around payments, collateral, real-world assets (RWAs) tied to blockchain rather than the broad speculation that powered previous booms.

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“We think RWAs will overgrow traditional crypto assets [onchain] over the next three years, that’s where I think the space is going,” said Stani Kulechov, founder of lending marketplace Aave, which rolled out an offering targeting institutions about a year ago.

“We see tokenised stocks coming on chain, and that driving a little bit more traffic into crypto. But instead of the crypto assets, a lot of this interest is going to go into tokenised stocks.”

Institutions tame Bitcoin volatility

Market maker Wintermute’s trading data offers one indication. Institutional counterparties accounted for 72% of its spot over-the-counter flow in the first half of 2026, the highest share on record.

Yet the number of tokens traded by its institutional clients increased just 24% between the first half of 2024 and the first half of 2026, compared with 76% among retail clients.

“With institutions, they are way more selective,” said Jasper De Maere, OTC trader at Wintermute, noting that institutions are drawn to a select few coins like HYPE, tied to the popular derivatives exchange, that give them access to technological innovation.

“It will be not a rising tide lift all boats, which we saw in previous cycles. A few coins will do exceptionally well, and then there will be a large set of laggards.”

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Read: Bitcoin’s $235bn crash masks bigger shift in crypto

Institutions’ entry makes the market less volatile: Already, Bitcoin’s one-year annualised volatility has dropped to 42% in early August, from 48% a year ago and 69% in 2022, according to industry data tracker Glassnode.

Since retail traders tend to chase highly volatile assets, hoping for fast and high returns, many have moved to hotter markets like artificial intelligence and prediction markets.

Institutions also have “significantly more capital discipline,” De Maere said. “They chase narratives for a significantly shorter period of time.”

Banks deepen crypto push

At the same time, some of the world’s biggest banks are moving deeper onto crypto infrastructure. Nick Ducoff, head of institutional growth at the Solana Foundation, said seven of the 29 global systemically important banks now build on Solana, up from two or three about a year ago, across uses including trade finance, funds and custody.

More favourable regulation of the industry in the US under President Donald Trump, as well as the new stablecoin law signed last year called the Genius Act have been a big factor driving institutional adoption, he said.

“With the passage of the Genius act, I point to that as the starting gun, and everyone started racing,” Ducoff said.

The two trends aren’t necessarily at odds. They suggest institutional adoption is becoming increasingly detached from the fortunes of the broader retail crypto market.

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Wall Street can find more uses for blockchains, stablecoins and a select group of digital assets even as liquidity drains from other corners of crypto. JPMorgan Chase uses the Ethereum blockchain for tokenised deposits, letting clients quickly exchange funds or post collateral.

State Street Investment Management and a partner offer a tokenised private liquidity fund designed to enable 24/7 onchain cash management via stablecoin on Solana.

The industry may finally be getting the institutional adoption it spent years chasing, just not the broad crypto boom that was supposed to come with it. Bitcoin is trading at about half where it was at its all-time high in October.

Read: The crypto revolution is in real-world asset tokenisation

“The big question which will decide the direction is whether retail will return,” De Maere said said.

In the meantime, most crypto venues – Bitget included – are pursuing their “everything exchange” strategies, offering everything from stocks to commodities trading. Already, about 20% of Bitget’s average daily volume today comes from non-crypto assets, up from zero a year ago, Chen said.

“That’s how we can survive the current bear market,” she said.

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