It is expected that by 2026, at least six ICOs with a scale of billions of dollars will emerge through platforms like Coinbase.

Written by: Matt Hougan, Bitwise CIO

Compiled by: AididioJP, Foresight News

A core idea of investing in cryptocurrency is that it will reshape the infrastructure of the financial industry.

So far, we can point to three areas that have made actual progress:

• Bitcoin is reshaping gold's inflation resistance

• Stablecoins are reshaping the dollar

• Tokenization is reshaping trading and settlement

While these transformations are still in their early stages, the trends are already quite clear. I believe that eventually, most assets will be tokenized, most dollars will circulate through stablecoins, and Bitcoin will be widely accepted like gold.

These are trillion-dollar opportunities, enough to drive the cryptocurrency market into a bull market lasting a generation. But just this Monday, we welcomed a fourth important area: capital formation. I believe this will become a key theme in the cryptocurrency space by 2026.

Next, I will explain what specifically has happened, why this is so important, and how to seize this investment opportunity if my judgment is correct.

First, let’s review some background

Capital formation is one of the most important functions in the financial sector. Through this process, entrepreneurs can raise funds, start new companies, develop products, and create jobs.

Unfortunately, the current system is not only rigid and inefficient but also extremely unfriendly to individual investors.

Institutional funds flow to top venture capital firms, which then reinvest in the best startups. These companies remain private for a long time, continuously accumulating value for early shareholders. By the time they finally go public, shares are mainly sold to other institutional investors. Ordinary investors can only participate in the final stages. This system is costly and heavily regulated, leading to a far lower number of IPOs today than in the past.

Cryptocurrency attempted to change this situation during the ICO boom of 2017 and 2018. ICOs allowed ordinary people to invest before projects went public, directly connecting entrepreneurs and retail investors.

But to be honest, the outcome was a disaster.

Due to a lack of regulation, the vast majority of ICOs ultimately proved to be scams. Fraudsters raised billions from unsuspecting members of the public and then disappeared with the money. The situation escalated to the point where the U.S. Securities and Exchange Commission had to intervene, even threatening to pursue criminal charges against promoters. The severe crackdown in 2018 ended the ICO boom and plunged the cryptocurrency market into a long winter.

So, what is different now?

Most people who experienced the ICO boom of 2017-2018 consider it a complete failure, fully exposing the opaque issues in the cryptocurrency space. However, a small number of people saw potential in it.

Despite the numerous problems with ICOs, it did prove one thing: cryptocurrency can quickly raise funds for new projects. Compared to the high costs, cumbersome processes, and wealth bias of traditional IPO routes, ICOs are indeed cheaper, faster, and more equitable.

Current SEC Chairman Paul Atkins is one of those who see this potential. His support for ICO-like projects is not surprising: before joining the SEC, he served as co-chair of the Token Alliance, an organization dedicated to promoting innovation in ICO-like tokens. He also served as a director at Securitize, a company focused on tokenization.

In July of this year, Atkins publicly called for the establishment of a new regulatory framework and risk prevention system to create conditions for high-quality ICOs. He argued that as long as we can address the issues of ICO 1.0, we can expect a capital formation boom led by cryptocurrency.

This Monday, Coinbase took an important step in this direction by announcing the launch of its ICO platform. From now on, Coinbase will introduce a rigorously vetted cryptocurrency project every month. This allows investors to participate in funding before the project goes live and enables project teams to explore new financing channels. Coinbase will implement strict standards, including team background checks, information disclosure requirements, and ensuring that insiders cannot sell tokens within six months after the project goes live.

In short, through self-regulation, they aim to address many of the issues from the ICO era of 2017-2018.

My predictions and outlook

I expect that by 2026, at least six ICOs with a scale of billions of dollars will emerge through platforms like Coinbase. Although this scale is still small compared to the traditional IPO market, where there were 176 IPOs in the U.S. in 2024, raising a total of $33 billion, the success of these ICOs will prove that entrepreneurs can indeed raise funds directly from investors, often on better terms than traditional IPOs.

Over time, I believe more and more projects will choose the direct ICO model rather than traditional financing paths.

Regarding how to invest in this theme, I have a few thoughts:

If my judgment is correct, the most direct investment target is Coinbase. This company is leveraging its dominant position in the cryptocurrency trading space to explore new markets. It is not only the Charles Schwab of the crypto world but also a combination of Charles Schwab + Goldman Sachs + the New York Stock Exchange.

At the same time, a healthy ICO market will also benefit large programmable blockchains like Ethereum and Solana, as many ICO projects will be built on these platforms.

More broadly, the revival of ICOs will be another important milestone in the cryptocurrency space. Today's cryptocurrencies have more potential than a few years ago because we have the stories of stablecoins and tokenization. If we add the billions of dollars raised through ICOs, this narrative will be even more compelling. This trend tells us to make broader market allocations: for example, investing in index funds that include a basket of crypto assets or crypto stocks. In other words, don’t get caught up in picking which horse to bet on; instead, bet that the whole race will get better and better.

This race is becoming increasingly exciting.

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