Crypto’s Grand Masquerade: Wall Street Dons a Web3 Mask

Finance

What to know, dear reader, if one must:

Silicon Valley Bank’s Anthony Vassallo, a man of impeccable prognostications, declares that the great crypto carnival is no longer a sideshow. Institutional adoption, he says, is accelerating with the fervor of a debutante at her first ball, bringing with it larger venture capital checks, more bank-led custody, and the inevitable M&A waltz.
Stablecoins, those digital darlings, are poised to become the “internet’s dollar,” fueled by regulation as clear as a muddled martini and enterprise demand for payments and settlement. How quaint.
Tokenized real-world assets and AI-driven crypto applications are, apparently, shifting blockchain from speculation to core infrastructure. The bank assures us this is not merely the latest fad, but a revolution in the making. We shall see.

Last year, crypto regained its footing, like a tipsy guest at a society dinner. This year, according to Silicon Valley Bank (SVB), it is to be fully integrated into the financial system. How charming.

Regulatory clarity improved in 2025, institutional engagement quickened its pace, and capital markets reopened their doors. Now, the focus shifts from price cycles to infrastructure, as digital assets embed themselves into payments, custody, treasury management, and capital markets. How very modern.

“Regardless of how tangible or visible,” intones Anthony Vassallo, senior vice president of crypto at SVB, with the gravitas of a man who has seen it all, “all the forces shaping crypto today share a common thread: Crypto is moving from expectations to production. Pilot programs are scaling and capital is consolidating.” One can almost hear the clinking of champagne glasses.

The bank, which maintains over 500 relationships with crypto companies and venture firms-a veritable who’s who of the nouveau riche-says institutional capital, consolidation, stablecoins, tokenization, and AI are converging to reshape how money moves. How thrilling.

After its 2023 collapse, SVB was rescued by North Carolina-based First Citizens Bank and now operates within a top-20 U.S. bank with $230 billion in assets. In 2025, it added 2,100 clients and ended the year with $108 billion in total client funds and $44 billion in loans. A phoenix from the ashes, if ever there was one.

Fewer experiments, more conviction

“The suits and ties have arrived,” declares the bank’s 2026 outlook report, with the air of a society matron welcoming the season’s new arrivals.

Venture funding in U.S. crypto companies rose 44% last year to $7.9 billion, according to PitchBook data cited by SVB. While the deal count fell, median check sizes climbed to $5 million as investors concentrated capital into stronger teams. Seed valuations jumped 70% from 2023 levels. How very discerning.

The bank warns, with a note of caution, that demand for institutional-grade crypto companies could outstrip the number of investable firms. A shortage of suitable partners, how dreadful.

“In 2026, conditions are ripe for continued growth in VC investment in crypto,” Vassallo pronounces. “As institutional adoption accelerates, driving larger venture capital checks, we expect continued capital concentration in fewer companies with investors prioritizing higher-quality projects and follow-ons into proven teams.” How very exclusive.

“For end users, the result will be a more seamless experience across everyday financial interactions, from sending cross-border payments to managing an investment portfolio.” How convenient.

Corporate balance sheets are reinforcing the shift. At least 172 public companies held bitcoin in the third quarter of 2025, up 40% from the second, collectively controlling roughly 5% of circulating supply, according to data referenced by SVB. A new class of digital asset treasury companies has emerged, treating crypto accumulation as a core strategy. How very forward-thinking.

Meanwhile, traditional banks are moving deeper into the sector. JPMorgan, the largest U.S. bank by assets, plans to accept bitcoin and ether as collateral, Bloomberg reported last year. SoFi Technologies offers direct digital asset trading. U.S. Bank provides custody through NYDIG. SVB expects more institutions to roll out lending, custody, and settlement products as compliance guardrails solidify. How very reassuring.

M&A and the race to full-stack crypto

Why build when you can buy? A question as old as time itself.

More than 140 venture capital-backed crypto companies were acquired in the four quarters ending in September, a 59% year-over-year jump, according to the bank’s analysis of PitchBook data. Coinbase’s $2.9 billion acquisition of Deribit and Kraken’s $1.5 billion purchase of NinjaTrader underscored the scale. How very ambitious.

The trend extends to banking charters. In 2025, 18 companies applied for charters from the Office of the Comptroller of the Currency (OCC), most of them blockchain-enabled firms. The OCC granted conditional approval to digital-asset-focused trust banks including custody provider BitGo, Circle Internet, Fidelity Digital Assets, Paxos, and Ripple. How very official.

For SVB, that marks a turning point: stablecoin and custody infrastructure moving inside the federal banking perimeter. The bank expects traditional financial institutions to accelerate dealmaking rather than risk being disrupted by vertically integrated crypto-native rivals. How very prudent.

“We expect M&A to set a record again in 2026,” Vassallo declares. “As digital asset capabilities become table stakes for financial services, companies will focus on acquisition strategies instead of building products from scratch.” How very efficient.

“To meet market demands ranging from stablecoin capabilities to full-stack crypto banks, exchanges, custodians, infrastructure providers, and brokerages will consolidate into multiproduct companies,” he said. How very comprehensive.

Stablecoins become the ‘internet’s dollar’

Stablecoins, SVB said, are evolving from trading tools into digital cash. How very progressive.

With near-instant settlement and lower transaction costs than interbank transfer system ACH or card networks, dollar-backed tokens are attractive for treasury operations, cross-border payments, and business-to-business settlement. How very practical.

Regulatory clarity is accelerating adoption. The U.S. GENIUS Act, passed in July, established federal standards for stablecoin issuance, including 1:1 reserve backing and monthly disclosures. Similar frameworks are in place in the EU, U.K., Singapore, and the UAE. How very global.

Beginning in 2027, only permitted entities such as banks or approved nonbanks will be allowed to issue compliant stablecoins in the U.S. SVB expects issuers to spend 2026 aligning products with federal oversight. How very compliant.

Banks are already experimenting. Société Générale introduced a euro stablecoin. JPMorgan expanded JPM Coin to public blockchains. A group including PNC, Citi, and Wells Fargo is exploring a joint token initiative. How very collaborative.

Venture dollars are following. Investment in stablecoin-focused companies surged to more than $1.5 billion in 2025, up from less than $50 million in 2019, according to SVB. How very lucrative.

In 2026, the bank expects tokenized dollars to move into core enterprise systems, embedded in treasury workflows, collateral management, and programmable payments. How very seamless.

Tokenization and AI

Real-world asset tokenization is scaling. Onchain representations of cash, Treasuries, and money-market instruments exceeded $36 billion in 2025, according to data cited by the bank. How very substantial.

Funds from BlackRock and Franklin Templeton have amassed hundreds of millions in assets, settling flows directly onchain. ETF issuers and asset managers are testing blockchain-based wrappers to reduce transfer costs and enable intraday settlement. Robinhood now has tokenized stock exposure for European users and plans U.S. expansion. How very expansive.

SVB sees private and public markets converging on shared settlement rails, with tokenization expanding beyond Treasuries into private markets and consumer-facing applications. How very inclusive.

Then there’s the convergence with AI. In 2025, 40 cents of every venture dollar invested in crypto went to companies also building AI products, up from 18 cents the year prior, according to SVB’s analysis. Startups are building agent-to-agent commerce protocols, and major blockchains are integrating AI into wallets. How very futuristic.

Autonomous agents capable of transacting in stablecoins could enable machines to negotiate and settle payments without human intervention. Blockchain-based provenance and verification tools are being developed to address AI’s trust deficit. How very innovative.

The consumer impact may be subtle. SVB predicts that next year’s breakout apps won’t brand themselves as crypto. They will look like fintech products, with stablecoin settlement, tokenized assets, and AI agents operating quietly in the background. How very discreet.

From expectation to infrastructure

Silicon Valley Bank’s overarching message is to treat crypto as infrastructure. How very pragmatic.

Pilot programs are scaling. Capital is concentrating. Banks are entering. Regulators are defining the perimeter. Blockchain technology is poised to underpin treasury operations, collateral flows, cross-border payments, and parts of capital markets. How very foundational.

Volatility will remain, and headlines will continue to move prices. But the deeper narrative, the bank argues, is about the plumbing. How very prosaic.

“In 2025, momentum in onchain representations of cash, treasuries, and money market instruments carried real-world assets into the financial mainstream,” Vassallo said. “This year, cryptocurrency will be treated as infrastructure.” How very inevitable.

2026-02-16 18:35