Author: Avishay Ovadia (Founding Partner, Collider)
Compiled by: TechFlow
TechFlow Introduction: Collider is an Israeli crypto VC. Although not a large fund, its views can reflect some judgments from upstream industry practitioners.
Its Founding Partner Avishay Ovadia wrote an article on the direction of the crypto industry: The era of retail investors is over. Institutions are not here to 'embrace decentralization'; they are here to take apart the components.
They want blockchain's efficiency, not crypto's ideology. For entrepreneurs and investors, the old playbook is obsolete. The rules of the digital asset economy have completely changed.
Main Text:
For a decade, we told ourselves a fairy tale.
We believed mass adoption of crypto would be a bottom-up revolution. Ordinary people, retail investors, would grow tired of banks, swallow the orange pill, and migrate to a permissionless utopia.
Last year, that fantasy was permanently disproven.
The visitors flooding in were not the users we expected; they were gamblers. They weren't looking for a new financial system; they were looking for a casino with higher leverage. They traded memecoins, took profit from each other, and disappeared into the shadows when the music stopped.
But while retail was busy losing money on memecoins, something more important happened. Those 'giants'—institutions, banks, payment behemoths—did not leave. They went all in.
They weren't here because they believed in decentralization. They discovered blockchain is the most efficient pipeline for moving value ever created. They weren't chasing a technological ideal; they were chasing profits. Larry Fink recently said tokenization is one of two major trends reshaping financial services. We are no longer talking about a niche market, but a $140 trillion transformation.
The Great Transfer of Power
We handed over the keys to the kingdom ourselves. We built the infrastructure, validated the concepts, and then the incumbents came to harvest the territory.
We suffered from immense hubris. We thought we could change them. We thought Bitcoin's miracle could be replicated for any altcoin. We thought they would eventually buy our useless governance tokens, our ghost-town L1s and L2s, and play by our rules. We were wrong. For institutions, relinquishing control isn't 'progress'; it's suicide. Their business models are built on control.
So they didn't come to play in our mud. The vast majority of institutions won't join our DAOs, nor care about our 'community vibes'. They are building their own walled gardens, joining ecosystems like Canton, Zero, Tempo, Kinexys, building orchestration layers that connect traditional platforms to new chains. They are using blockchain, tokenization, instant settlement, self-custody, but stripping away the 'crypto' skin.
They are keeping user privacy, data silos, and profits. They are taking our open-source code, forking our protocols, but not buying our tokens. Swallowing the technology, spitting out the ideology.
The Game's Evolutionary Path
The game has evolved along a predictable, chaotic trajectory to this final station today.
From 2009 to 2014 was the Bitcoin Anarchists phase, a small group of cypherpunks tinkering on the fringe. Then came the Crypto Industry phase, with Ethereum and smart contracts taking center stage. By the 2018 bear market, the narrative shifted to Blockchain Technology, with enterprises trying to unbundle the ledger from the asset, but failing. Then came the rise and spectacular collapse of Web3, with NFTs, GameFi, and the creator economy shining briefly until FTX imploded and turned off all the lights. In 2024, propelled by an election year and the Trump candidacy, the Crypto Industry made a glorious return, only to slide into a season of greed, disgust, and toxicity.
Now, in this new bear market, we have finally arrived at the destination we've been racing towards: the Digital Asset Economy.
This is the final stop. Crypto is no longer an 'industry'; it has become an infrastructure layer. It is the invisible engine powering the world of fintech. It's not crypto eating Wall Street; it's Wall Street eating us.
This is Actually Good News
If you're a purist, this feels like betrayal. If you're a strategist, this is where the real money is.
We have finally reached the node where trillions of dollars are waiting to be deployed. We have entered the 'Distributor Era'. Big money doesn't move without regulation, KYC, and bank-sanctioned rails. DTCC announcing it will tokenize assets held by DTC and support liquid assets like the Russell 1000 index—this isn't a pilot; it's the sound of the floodgates opening.
We are about to tokenize every asset on Earth, from real estate to private credit to government bonds. But most of it won't happen through decentralized swaps on public chains. It will happen through payment giants and banks.
Operating the Machine
Two paths. You can sit in a corner and cry 'the crypto spirit is dead,' or you can recognize we just won the biggest war in financial history. We convinced the world this technology works. Now, we have to build for the people who actually have the capital to use it.
The future of this industry isn't in vaporware tokens. It's embedded in the hard infrastructure serving the new players. It's running today: look at the institutional-grade solutions already broadcasting trillions of dollars in transactions on-chain, trading billions between institutions, tokenizing billions in assets. This is the new application layer.
The New Playbook
Stop being a 'crypto bro.' Start thinking like a fintech veteran.
Think: If every asset on Earth is tokenized, what competitive advantage does buying your particular 'crypto' token have? If you can trade any global asset 24/7, with instant settlement, through a trusted traditional broker, why would you send money to an offshore exchange or sweat over a non-custodial wallet? Why worry about hacks and total loss, instead of trading easily and safely through your existing financial dashboard?
Entrepreneurs, don't build in a vacuum. Before writing the first line of code, visit every distribution link in the chain. Understand their needs, dive deep into their fears: fear of regulatory crackdowns, fear of losing control, fear of unmanageable security incidents. Your job is to create something they can't build themselves but fits perfectly into their existing world.
Investors, the old playbook is dead. The days of early investing in low-float, high-FDV vaporware and praying for retail to provide a 100x exit are over. Digital asset investing is becoming brutally hard. We are moving towards real sales cycles, real utility, and revenue-generating businesses. You need to invest in projects with real moats in a world of open-source technology. 99.99% of tokens don't have that. Finding projects with strong moats, top-tier teams, real usage, token value accrual, institutional adoption, reasonable valuations, healthy vesting schedules, active communities, high liquidity, risk management capabilities, and market opportunity is hard. But it can be done.
Stop fighting the institutions. They *are* the new distribution channels. They will bring the next billion users and the next $100 trillion into the digital asset economy. Even if those users have no idea they're using a blockchain.
The game has changed. The players are bigger. The stakes are higher. Welcome to the final stop. What you do next is up to you.
