A commentary article published by MarsBit and credited to BitalkNews argues that the crypto industry has undergone a deep structural shift since the 2021 bull market, especially across the 2024 to 2026 period. Its central thesis is that crypto is no longer operating like a frontier market driven by low barriers, open experimentation and retail-led upside. Instead, it is increasingly behaving like a branch of traditional finance, where compliance, licensing, capital access and institutional distribution define competitive advantage.
The article frames the post-bull-market period as one of prolonged pain and consolidation. It points to the collapse of large numbers of tokens, the shutdown of once-prominent projects and heavy retail losses as evidence that the old wealth-creation narrative has weakened. In its view, the era when a few developers could launch a project from a white paper with minimal capital has largely faded, replaced by a market in which regulatory clarity has raised, rather than lowered, the threshold for legitimate operation.
Compliance costs are pushing crypto startups toward a TradFi model
According to the article, a crypto company seeking to operate compliantly in the United States may need to spend around $750,000 to $1.2 million over its first three years on multi-state compliance alone. Once the business scales, annual compliance costs can exceed $2 million. It also notes that obtaining a New York BitLicense commonly takes more than a year. In Europe, MiCA imposes minimum capital requirements of €50,000 to €150,000, while firms must also shoulder continuing reporting obligations and compliance staffing costs.
The article argues that, taken together, these burdens make crypto entrepreneurship look increasingly similar to starting a regulated financial company. Launching a product is no longer just a matter of writing code and finding users. Teams now need legal structuring, licensing strategies, risk controls, reporting systems and sufficient funding to support months or years of pre-revenue regulatory work. In that sense, the piece says the old “move fast with little capital” startup environment has narrowed significantly.
VC funding has recovered, but early-stage protocol funding has not
The article says global crypto VC investment recovered to about $20 billion in 2025, but adds that the rebound has not translated into broad support for early founders. In the first quarter of 2026, seed and pre-seed rounds together accounted for only 5.2% of all crypto financing, while mature companies captured 57% of the total. Dragonfly managing partner Hadick, after raising a new $650 million fund, reportedly summarized the state of the sector with a short phrase: “mass extinction event.”
It then highlights a shift in major fund strategy. In May 2026, a16z closed its $2.2 billion Crypto Fund 5. Chris Dixon, who leads the firm’s crypto effort, said the capital would no longer be focused on early protocol bets and would instead prioritize stablecoin payments, RWA tokenization, prediction markets and onchain lending. The article contrasts this with a16z’s first crypto fund in 2018, a $300 million vehicle centered on protocol-layer innovation, and argues that large VC firms are effectively shutting the main funding window for early protocol startups.
The article also says top crypto funds are broadening beyond crypto itself. Paradigm, which it describes as managing $12.6 billion, announced a new $1.5 billion fund in February 2026 with a mandate extending into AI and robotics. Citing SVB data, the piece states that for every $1 of VC capital invested in crypto in 2025, $0.40 simultaneously flowed to companies also building in AI, up from $0.18 in 2024. That change, in the article’s view, underscores both the competition for capital and the growing preference for sectors with clearer commercialization paths.
M&A is increasingly about licenses, customers and distribution
Citing Architect Partners, the article says crypto M&A reached $37 billion across 356 deals in 2025, more than seven times higher year over year. It argues that nearly all of this consolidation follows one dominant logic: acquiring licenses rather than technology. In its examples, Coinbase’s $2.9 billion acquisition of Deribit is framed as a way to secure derivatives capabilities and licensing exposure; Kraken’s $1.5 billion purchase of NinjaTrader is described as a move to obtain futures licenses and customers; and Ripple’s $1.25 billion acquisition of Hidden Road is presented as a bet on institutional finance distribution.
The article says this dynamic became even clearer in 2026 as traditional financial incumbents moved from partnership into direct acquisition. It cites Mastercard’s reported $1.8 billion acquisition of crypto payments firm BVNK as evidence that legacy finance players are no longer simply integrating with crypto providers from the outside. Instead, they are buying crypto capabilities outright. For latecomers, the article suggests, the race is less about catching up technologically and more about using capital to buy time that would otherwise be lost in licensing and regulatory approval.
The market is now dominated by three major groups
The piece divides the new crypto landscape into three main categories of winners. The first consists of licensed companies such as Coinbase, Kraken and Ripple, which are broadening their moats through acquisition and regulated expansion. The second includes top-tier venture firms like a16z and Dragonfly, whose capital is flowing into validated themes such as stablecoins, tokenized real-world assets and AI agents rather than speculative protocol experiments. The third group is made up of traditional financial institutions entering crypto with both licenses and balance-sheet strength.
To illustrate that third category, the article points to BlackRock issuing tokenized funds on Ethereum, Franklin Templeton working on onchain Treasuries and Stripe building in stablecoin payments. It also cites a March 2026 transaction in which Intercontinental Exchange, parent company of the New York Stock Exchange, invested in OKX at a $25 billion valuation and obtained a board seat, in exchange for future support around tokenized stock trading. The broader message is that traditional finance is no longer observing the sector from the sidelines; it is taking direct ownership positions in crypto platforms themselves.
Compliance infrastructure providers are emerging as overlooked beneficiaries
Another important theme in the article is that infrastructure vendors may be among the clearest winners in a more regulated market. It says Chainalysis has raised a cumulative $538 million by providing onchain anti-money-laundering tools to exchanges, and generated $250 million in revenue in 2024. Sardine, meanwhile, has raised $145 million to provide identity verification and transaction risk controls for crypto firms. As exchanges, issuers and brokers face tighter scrutiny, the article argues, the companies selling compliance and monitoring tools stand to benefit directly.
The same pattern appears in tokenized equities, according to the piece. Firms such as Backed Finance, Ondo Finance and Dinari, all associated with traditional financial licensing, are described as key providers of issuance and custody rails. Kraken is said to have acquired Backed Finance directly. The article also references the June 2026 SpaceX listing, when Binance, Bybit, Bitget and MEXC all promised users tokenized shares at IPO pricing but were unable to deliver because they had no underwriting allocation. By contrast, firms with brokerage licenses, such as Backpack, and platforms like Ondo and Dinari that clearly stated they would use secondary-market pricing, were presented as the ones able to execute.
Crypto’s value logic is increasingly converging with traditional finance
In its conclusion, the article argues that crypto’s earlier wealth effect rested on three conditions: extremely low barriers to entry, relatively similar access to information between retail and institutions, and widespread asset mispricing. Those conditions, it says, have broken down rapidly between 2024 and 2026. The approval of spot Bitcoin ETFs in January 2024 is presented as a major turning point, because it brought Bitcoin more firmly into a dollar-denominated financial framework and made its behavior resemble that of growth technology equities more than a purely idiosyncratic crypto asset.
For founders, the article says crypto-native opportunity has not disappeared entirely, but its form has changed. It cites Pump.fun, which focuses on token-launch infrastructure rather than launching its own tokenized project, and the Telegram trading bot Trojan as examples of small teams that still scaled quickly. Yet it argues that these businesses succeeded mainly by building more efficient rails for speculation rather than by opening fundamentally new protocol-level markets. Even this tools-layer window, the piece warns, may be narrowing.
What remains fundable at the top end is becoming increasingly concentrated. The article says a16z, Paradigm, Dragonfly and Coinbase Ventures are all converging on a similar set of priorities: stablecoin payment infrastructure, RWA tokenization, onchain execution layers for AI agents, institutional-grade DeFi tools and compliance technology. These sectors share common characteristics: they are capital-intensive, license-intensive, slow-moving and more linear in expected returns. VC firms, the article argues, are now far more focused on institutional adoption pathways and regulatory moats than on protocol novelty.
That leads to the article’s broadest claim: the protocol-layer innovation window is largely closed, with innovation shifting toward application layers and compliance infrastructure. When entry barriers resemble those of traditional finance, when winners are defined by licenses and banking relationships rather than purely technical superiority, and when M&A replaces open competition as the main route to market consolidation, crypto begins to distribute value in much the same way as traditional finance. In that environment, the article suggests, founders and investors face a more binary choice: adapt to the new rules, or keep searching for the next corner of crypto where uncertainty and asymmetry still exist.