In the Eastern Eight Time Zone this week, UBS publicly emphasized that it will advance its cryptocurrency business with a "fast follower" approach, while the news that on-chain compliance infrastructure company TRM Labs has completed $70 million in Series C financing, with a valuation of approximately $1 billion is simultaneously trending. These two seemingly unrelated pieces of news together outline the timeline of traditional finance transitioning from observation to accelerated entry. On one side is UBS, representing global banks that have long relied on stringent risk control and compliance culture; on the other side is the crypto-native world symbolized by Solana's issuance of over 1.3 million new tokens in a single month, which experiments with extreme speed and layered leverage. As regulatory pressure digests the previous round of extreme speculation and retail enthusiasm clearly recedes, "compliance capability" is transforming from a burden viewed as a compliance cost into an infrastructure that can accommodate institutional funds and drive a new round of growth. The real question worth asking is: when Wall Street chooses not to be a pioneer but to collectively "fast follow" when the rules are clearer, who will write the next phase of the game rules—native projects, compliance tool providers, or banks and sovereign funds with large balance sheets?
UBS Does Not Choose to Be a Pioneer: The Rhythm of $70 Trillion in Asset Management
● Risk Pricing and Rhythm: UBS CEO Sergio Ermotti clearly stated, "We will not be pioneers, but will adopt a fast follower strategy." Behind this statement is the large banks' risk-reward assessment regarding the cryptocurrency business: unwilling to bear the institutional and public opinion risks of being among the first "crab eaters" before regulatory, accounting, and reputational costs are fully priced, but also no longer choosing to stay completely away, instead rapidly following when the regulatory framework and industry practices become clearer, occupying the scale advantage of the second tier.
● $70 Trillion in Leverage: According to a single source, UBS currently manages assets exceeding $70 trillion. Once it opens a controlled exposure to cryptocurrency at the custody, trading, or structured product level, even if only providing a limited allocation for high-net-worth and institutional clients, it will amplify the "allocable volume" of assets like Bitcoin on the compliance asset side, and further accelerate the slow migration of funds from traditional portfolios to those containing on-chain assets through research reports, investment advice, and asset allocation models.
● Drivers of Attitude Change: Looking back at previous bull markets, many large banks were more like "watching from the sidelines," at most observing crypto volatility from a distance through innovation labs, small-scale pilots, or partnerships with third parties. This time, the subtle change in attitude comes from three points: first, the regulatory path has gradually become clearer compared to earlier stages, with no lack of reference samples; second, client demand has clearly institutionalized, shifting from retail speculation to asset allocation demands from family offices, funds, and corporate treasuries; third, crypto assets are gradually being viewed not just as speculative stories, but as options in portfolios for inflation hedging or high-volatility satellite assets.
● The Game Meaning of "Fast Follower": The so-called fast follower means allowing pioneering institutions to step on the pits of technology, compliance, and product structure, and then entering with lower trial-and-error costs when custody standards, compliance guidelines, and risk models are more mature. For leading banks like UBS, this rhythm helps to quickly scale up while maintaining compliance and brand safety, leveraging existing client trust. However, for crypto-native players, this also means that the pricing power of high-net-worth and institutional flows may gradually shift from native platforms to compliance channels dominated by banks and large brokerages.
Compliance Becomes Business: TRM Labs' Tooling Moment
● Financing and Positioning: TRM Labs has completed $70 million in Series C financing, with a valuation of approximately $1 billion. Its core business is to provide on-chain compliance, anti-money laundering, and risk monitoring tools, building infrastructure for regulatory agencies, law enforcement, and financial institutions to "see the flow of funds on-chain." In a cooling primary financing environment and a declining expectation for crypto IPOs, this counter-cyclical financing itself indicates that capital is re-evaluating the asset value of "compliance capability."
● 40% Private Client Signal: According to a single source, about 40% of TRM's clients come from the private sector, including not only government and law enforcement agencies but also a large number of traditional enterprises, financial institutions, and payment service providers. This proportion indicates that purchasing on-chain compliance capability is no longer just a result of regulatory pressure, but increasingly more traditional institutions are proactively paying to enter the on-chain world, viewing compliance as the "ticket cost" to enter a new asset class and connect with new user groups.
● Being Favored Amid Valuation Retreat: Against the backdrop of the CfC St. Moritz report mentioning "investors' declining confidence in crypto IPOs," speculative narratives and high-valuation stories are generally being discounted. Capital continues to favor projects like TRM because when new speculative projects struggle to tell a premium story, infrastructure—especially compliance and risk control modules—becomes a rigid necessity that all participants cannot bypass, representing a long-term effective "shovel business" in the regulatory game.
● From Cost Center to Tooling Service: The rise of TRM reflects a common demand in traditional finance—large banks, payment giants, and sovereign funds must first ensure they can "see, calculate, and verify" to truly enter the on-chain world. Whether they can penetrate address subjects, assess transaction risks, and track suspicious funds determines whether they can set acceptable risk limits for on-chain assets under internal risk control and external regulatory assessments. Thus, compliance is no longer just a passive expenditure but is packaged into sellable, embeddable tooling services, becoming a new profit center.
From Sovereign Funds to Public Companies: Cautious Indirect Exposure
● Preference for Indirect Holdings: Research briefs mention that the Norwegian sovereign fund indirectly holds about 9,573 BTC through its shares in listed companies. This number is still pending verification, but the directional fact is clear—traditional and official funds, including sovereign funds, generally prefer "one layer of penetration" for indirect exposure rather than directly opening addresses on-chain to hold assets. They rely on listed companies, ETFs, or funds as a risk buffer, allowing professional operating entities to bear the operational and compliance details for them.
● MicroStrategy's "Proxy Volatility": MicroStrategy has long been increasing its Bitcoin holdings and is currently facing an approximate $750 million paper loss (according to a single source). The price volatility and public opinion pressure it bears on its balance sheet essentially serve as a "proxy service": traditional shareholders gain Bitcoin exposure by holding its stock without directly facing the management of on-chain wallets, anti-money laundering scrutiny, and public questioning due to high volatility. This model provides a replicable yet controversial example for other companies.
● Compliance Constraints Shape Pathways: For sovereign funds, insurance funds, and pension funds, regulations and investment charters typically impose very strict constraints on investment directions, leverage, and asset classes. Compared to directly holding on-chain assets, obtaining crypto exposure through traditional vehicles like stocks, bonds, and ETFs aligns better with existing compliance frameworks and accounting treatment logic, making it easier for auditing, risk measurement, and external disclosure. This "detour" approach means that on-chain assets are incorporated into the packaging layer of traditional asset portfolios rather than being held in native on-chain addresses.
● Market Implications of Side Betting: As more and more funds choose to "side bet" through listed companies and various financial products, price feedback is elongated, and the linkage between on-chain native liquidity and traditional asset markets is significantly enhanced. The volatility of assets like Bitcoin now has to pass through multiple filters of accounting treatment rules, information disclosure rhythms, regulatory reviews, and shareholder expectations. This transforms compliance standards, accounting principles, and disclosure details from behind-the-scenes variables into front-stage forces that influence pricing and volatility structures.
Speculative Heat and Regulatory Cold: The Contrast of Solana's Minting Frenzy
● Extreme Speed of 1.3 Million New Tokens: On the Solana network, the number of new tokens issued in a single month once exceeded 1.3 million, a phenomenon that has almost become a microcosm of "speed and speculation" in the crypto-native world. In a low-cost, high-performance public chain environment, retail investors and developers can mint tokens, initiate fundraising, and organize communities with extremely low thresholds, compressing the trial-and-error and speculation cycles to days or even hours, oscillating between celebration and liquidation.
● Issuance Thresholds Are Almost Zero: Compared to the complex approval processes, information disclosure requirements, and issuance thresholds in the traditional financial system, token issuance in the crypto world has almost no pre-screening. The reality that anyone can issue tokens allows innovation to explode at an exponential rate while also providing fertile ground for shell projects, scams, money laundering, and highly speculative bubbles. This structurally ultra-high degree of freedom is one of the roots of regulators' and institutional investors' persistent doubts about the on-chain ecosystem.
● Two Speeds in the Same Frame: On one side is the rapid minting and liquidity games on Solana without KYC, while on the other side are banks like UBS cautiously advancing crypto exposure under detailed compliance and risk control, and TRM adding "firewalls" for regulatory and institutional sides through on-chain monitoring. When these two speeds are placed in the same frame, it becomes understandable why regulators emphasize "understanding clearly before discussing openness," and why traditional institutions prefer to be a step slower to ensure compliance. After all, identifying long-term value amid the noise of 1.3 million tokens incurs significant information costs.
● The Balancing Proposition of Survival Public Chains: In this tension, public chains and projects that can survive long-term and accommodate institutional funds will find it difficult to continue relying solely on "unlimited open minting freedom" as a selling point. They need to find a new balance between openness and regulatory compliance—retaining innovation and permissionless characteristics while providing sufficient identity management, transaction monitoring, and auditing interfaces. Otherwise, traditional institutional funds and compliance demands can only remain off-chain or flow only to a few assets deemed "risk controllable."
Compliance Equals Growth: When Capital Begins to Pay for Rules
● Resonance of Four Clues: Connecting UBS's "fast follower," TRM Labs' valuation leap, the indirect exposure shaped by sovereign funds and listed companies, and the Solana minting frenzy reveals a common trend: institutional capital truly willing to allocate long-term is no longer paying premiums for a single story or track but is paying for the structure itself that is "regulatable, auditable, and accountable." Those who can provide clear risk boundaries are more likely to attract slow money.
● Narrative Shift After Declining IPO Confidence: The CfC St. Moritz report mentions "investors' declining confidence in crypto IPOs," reflecting that the narrative in primary and public markets is shifting from "telling a new story to arbitrage on listing" to "seeking business models that can traverse regulatory cycles." Under this new narrative, the ability to connect with multi-jurisdictional regulations and having complete compliance and auditing capabilities become prerequisites for projects to be selected by long-term funds, rather than just last-minute decorations before listing.
● Power Logic of Compliance Infrastructure: Compliance infrastructure serves as both a regulatory interface and an entry threshold for institutions. Whoever masters and standardizes tools for on-chain risk identification, KYC, and transaction monitoring controls which assets can be included in the compliant investment pool in the next bull market. In other words, compliance suppliers, custodians, and data service providers will have greater pricing power and selection rights in the next cycle, becoming the "behind-the-scenes referees" determining which projects can be seen by institutions and which assets can enter balance sheets.
● The Gray Area of a New Round of Alpha: For investors, this means that simply chasing high-volatility assets may no longer be the main opportunity. True alpha is more likely to come from the "gray area infrastructure" surrounding compliance, auditing, custody, and on-chain data—those businesses that are both needed by regulators and can serve institutional expansion. Projects that can find sustainable business models between regulation and innovation will have the opportunity to survive in the next round of regulatory and macro cycle changes and share the long-term dividends brought by the entry of slow money.
Slow Money Entry: The New Timeline of the Crypto Market
The slow pace, safety margins, and compliance necessities of traditional finance are forming a long-term coexistence tension with the fast pace, high leverage, and permissionless innovation of the crypto-native world. On one end is the extreme trial-and-error speed represented by 1.3 million new tokens on Solana, while on the other end are institutions like UBS, managing trillions of dollars in assets, slowly advancing their exposure under layers of risk control and compliance review. Together, they are reshaping the temporal structure of the crypto market.
In the coming years, capital is likely to diverge into two tracks: retail and high-risk preference funds will continue to rapidly rotate between fast chains and new narratives, chasing the next "get-rich-quick myth"; while sovereign funds, banks, and large institutions will focus more on top assets and infrastructure with clear compliance paths, viewing crypto as a part of long-term allocation rather than a one-time event. This structural layered flow will determine the rhythm and depth of market volatility.
For project teams, the insight is very direct: beyond narrative and technology, laying out compliance, transparency, and governance structures earlier will no longer be "the icing on the cake," but rather a prerequisite for capturing slow money and navigating regulatory and macro cycles. For individual investors, learning to discern which projects truly serve slow money and which are merely designed for short-term traffic will become a new standard for selection, as this will affect whether a project can survive the next round of regulatory tightening and liquidity withdrawal.
As more entities like UBS choose to "fast follow," ultimately bringing vast client assets onto the chain in a compliant manner, the crypto market may find it difficult to return to a singular emotion-driven bull-bear cycle, instead resembling a long-term structural market curve shaped by regulatory rhythms, interest rate cycles, and institutional reallocation. On this new timeline, compliance is no longer just a constraint but a core variable redistributing discourse and profit rights.
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