October took the team to Singapore for TOKEN2049 and Seoul for Korea Blockchain Week - including two Haus parties in both cities - where the rooms were full and the energy was contagious. Across both weeks, TradFi stopped asking what crypto is and started explaining how it improves its own products. Tokenization came up on nearly every panel and TradFi showed up in force, with the conversation shifting from crypto natives touting potential, to how its technology will improve products.
Our research team went deep on data. Taking a nuanced look at where it’s pointing: tokenized equities grew 483% this year, ETF flows follow price rather than lead it, and BTC has been higher 12 months after every US midterm.
The next one? Tomorrow (November 3).
Conference notes: KBW + Token 2049
Tokenization came up on nearly every panel. Last year RWAs barely featured. Panelists expect phase 1 (wrappers and tokenized versions of existing assets) to give way to native on-chain issuance. The biggest unlock is liquidity for assets that are illiquid today.
DeFi becomes the rails, not the product. The likeliest path to mass adoption is trusted institutions building on DeFi in the backend, while users never need to know what’s underneath.
Crypto is now a tool for allocators. Hedge funds are moving from basis trades toward longer-term positions, and US banks have gone from avoiding crypto to recommending it via ETFs.
AI x crypto isn’t priced in. Panelists flagged DePIN, identity and payments as the areas to watch.
Security and quantum are rising concerns. Attackers can run agents nonstop, while human error remains the largest attack vector.
Regulation is a speed bump, not a block. The CLARITY Act did not become law, but markets moved on quickly.
Neobanks and stablecoins win by localizing. Expect regional winners rather than one global player.
Tokenization is moving from pilots to launch. South Korea’s STO framework goes live in early 2027. Growth is coming from native on-chain platforms and from partnerships with consumer apps, such as Ondo’s work with Kakao.
Start with low-volatility assets. ETFs and money market funds come first, with institutions exploring staking and lending on-chain through protocols like Morpho and Aave.
Compliance is the gap to fill. AML/KYC is institutions’ top concern. If sanctioned wallets hold a meaningful share of a tokenized asset, it reflects poorly on the whole category, and on-chain screening is still lacking.
Stablecoins win by going local. Banks and institutions want non-USD stablecoins, especially JPY and KRW, as an easy retail onramp into tokenized assets.
Neobanks need a moat. Localized neobanks with country-specific strategies are emerging, but funds are more selective, looking for strong core metrics and a regulatory moat.
Perps concentrate at the top. Perp DEXs have exploded in number, but volume sits with a few leaders like Hyperliquid, Lighter and Variational. Institutional capital is expected to follow the leaders and venues that benefit from regulatory arbitrage.
Users want privacy over decentralization. Self-custody and privacy rank higher because users don’t want to be hunted or front-run.
Agentic trading is still early. If everyone runs the same tools, where does the alpha come from?
Localized campaigns win in Korea. It remains one of crypto’s strongest retail bases. Plasma’s Olive Young cashback and Frontier’s live trading competitions show teams building real-world campaigns users actually want to join.
Research in review
Every week we publish our perspectives on the markets (and more) through the lens of a market-tested liquidity provider, investor and incubator. Read the Eyes on the Market reviews for 18, 22 and 26 October here, along with deep dives below into topics our research team find relevant.
The Bright Side: Tokenized Equities | October 16
Tokenized equities grew 483% this year, from $654M to $3.8B.
Ondo still leads at about $1B, but its share fell from 56% to 26% as Binance’s bStocks and Robinhood entered.
BNB Chain’s share rose from 9% to 32%, while Ethereum’s fell from 50% to 22%.
Usage is growing faster than market cap. Weekly spot DEX volume rose 55x, against 5.8x for market cap.
Even so, $3.8B is about 0.005% of the US equity market.
Do ETF Flows Predict Where Bitcoin Goes Next? | October 22
In 7 of the 8 BTC sell-offs since the ETFs launched, the ETFs saw net outflows on the way down. ETF investors aren’t the dip buyers people assume.
Flows follow price rather than lead it (0.54 correlation with the prior five days, 0.03 with the next five).
Selling accelerates once BTC falls about 7% from its 20-day high.
Sell-offs are smoother but not shallower. The median fall is still about 21%, but they come more slowly and less often.
BTC is Always Higher 12 Months After a Midterm | October 29
BTC was higher 12 months after all three midterms (2014, 2018, 2022), by 25%, 45% and 92%. But two of the three were lower at three months first.
The election result mattered less than the cycle. The two Republican House gains went opposite ways at three months (−31% and +25%), because each vote landed at a different point in BTC’s four-year cycle.
2026 is the outlier. Past midterms arrived 67-73% below the cycle peak, while this one arrives about 36% below, and BTC may already have bottomed at $58.5k in June.
It is also the first midterm with crypto policy on the table. A likely Democratic House would slow the CLARITY bill, but agency rules from the SEC and CFTC stay in place.
Even so, three midterms is a small sample, and an AI-led equity sell-off is the biggest outside risk.
In the news
Bitcoin ETF buyers are trend followers, not setters, DWF Labs says, Cointelegraph
Solana reports 8.92B Q3 transactions as SOL trades near $104, CoinMarketCap
Tokenized Equities Reached $3.8 Billion This Year, DWF Labs Says, The Defiant
Here’s what bitcoin needs to break above $87,000, CoinDesk
Looking forward
November 4 and 11. Registrations are open now for HotDesk Wednesdays where we open our Dubai office to builders and individuals working to power the future with liquidity, capital, ideas, and infrastructure. Desks are free, and connection is guaranteed.
November 13. Lingling Jiang, Partner at DWF Labs and Falcon Finance, will speak in New York at Digital Asset Forum on the institutional adoption and retail speculation of RWA perpetuals.
December 1 and 2. Andrei Grachev (Managing Partner) and Alessia Baumgartner (VP Ecosystem), head to Dubai for Blockchain Life.
Until next month.
DWF Labs.