At Hong Kong Money Frontier 2026, IOSG Ventures made its case bluntly: in this bear market, crypto investing is drifting away from story-first bets and toward businesses that actually bring in revenue, generate cash flow, and matter as infrastructure. The firm said it is still putting money to work in crypto, and right now it sees stablecoins and payments, prediction markets, AI plus crypto, and on-chain trading and credit as the clearest places where real money is being earned.
The talk came from an on-site keynote by Jocy at Hong Kong Money Frontier 2026. IOSG said this is the fourth bear market it has lived through. The session centered on contrarian investing and frontier bets: why bear-market investing so often leads to the biggest returns. Right at the start, the speaker quoted a line from the Tao Te Ching, “Know the white, keep to the black,” and said a lot of people in the market no longer know how to invest in this phase. But IOSG is still deploying capital. And it wants more investors to join Web3 and back more Asian founders.
Bitcoin: the four-year cycle still outweighs broader narratives
On Bitcoin, IOSG said the rebound from the 2022 low came from several Bitcoin-specific triggers: the collapse of Silicon Valley Bank in 2022, spot ETF speculation that drove the price to $60,000, and Donald Trump’s election, which pushed it to about $120,000. By the end of 2025, IOSG said, most of those drivers were already priced in.
Then the picture changed. IOSG said the AI cycle started after 2025, and AI-linked assets, gold, and Nvidia all got stronger. Under ordinary logic, that should have been good for Bitcoin. It wasn’t. Bitcoin stopped reacting and is down 29% year to date.
To explain that, IOSG quoted a line from Bimo Community’s “Bitcoin Divine Power”: the four-year Bitcoin cycle once again overruled every more complicated narrative. The firm said its cycle framework had pointed to a Bitcoin top in October 2025, and that is exactly how it played out, with the bear market starting after October 2025.
IOSG added that even if some people brush off the four-year cycle as coincidence, expectations among crypto OGs can make it real. If enough investors think the market will top at a certain point in the cycle, they cut exposure at roughly the same moment. Group behavior. Simple as that. And that behavior helps produce the very cycle they were expecting. In IOSG’s view, that also helps explain why Bitcoin rolled over even with favorable macro conditions.
From that angle, IOSG said the main question over the next few months is no longer why Bitcoin has lagged. It is whether the next accumulation phase has already begun. The firm said its internal data work found a striking pattern: since 2015, each cycle has included roughly 1,060 days of upside. From there, IOSG laid out several scenarios:
- Scenario one: Bitcoin bottoms in the $45,000-$60,000 range around late October 2026.
- Scenario two: a lower low in Q1-Q2 2027, with Bitcoin falling to $40,000-$55,000.
- Scenario three: other possible versions.
IOSG said cycle forecasts always come in more than one version, but its internal research leans more toward the first scenario.
Stablecoins: why IOSG sees 2026 as a turning point
Stablecoins were the second big subject. IOSG called 2026 a huge year for stablecoins, one that carries outsized importance.
It used two historical comparisons. The first was May 1, 1975, when the U.S. Securities and Exchange Commission scrapped Wall Street’s fixed commission system after 183 years. IOSG said that shift turned stock trading from a rich man’s game into something ordinary people could join, and over time it helped create a $140 trillion asset-management industry where Fidelity and Vanguard emerged.
The second comparison was China’s entry into the World Trade Organization in 2001, which IOSG described as one of the most important events in the reshaping of the Chinese economy.
From there, IOSG argued that crypto is now going through a similar break in the pattern, this time via stablecoins. It said the GENIUS Act becoming law means banks can now legally issue dollars on-chain. In IOSG’s view, that is the turning point where crypto shifts from a high-risk asset category into legitimate financial infrastructure. Looking back, the firm said, 2026 may be remembered the way 2001 is remembered.
Ethereum: strengths, weaknesses and the question of leadership
IOSG split Ethereum into two buckets: strengths and problems.
On the strength side, it listed four points. Ethereum is still the main settlement layer for the biggest stablecoins and real-world assets, or RWA. Most DeFi security and yield still sit on Ethereum. Through Layer 2 scaling, the finality of the wider rollup set still settles back to Ethereum. And according to IOSG, Ethereum has deeper developer infrastructure than any other Layer 1 chain.
On the problem side, the firm pointed to fee capture moving from Layer 1 to Layer 2, obvious ETH/BTC underperformance in this cycle, and competition from newer chains such as Hyperliquid, along with off-chain alternatives.
Still, IOSG said the deepest problem is not technical competition. It is leadership. The talk compared Vitalik Buterin with Elon Musk and said many of Vitalik’s ideas only become fully understandable 10 years later, once people can see why he said them and how they might actually be built. What the market wants most, IOSG said, is for Vitalik to be more directly on the front line, the way Elon is.
IOSG also said Vitalik has stated that he wants Ethereum to become a “smaller ship.” But from Tomasz’s departure to the creation of a new Ethereum institution, IOSG said the same core question keeps coming back: who leads Ethereum, who governs it, who manages it, and which founder can stand at the front line and help this decentralized and open organization become great again.
On stablecoin distribution by chain, IOSG said Ethereum is more centered on institutional capital and developed markets, while Tron is dominated by USDT and serves developing markets and cross-border dollar flows.
How IOSG is allocating capital in the bear market
IOSG said it has redrawn its portfolio allocation during the bear market. It has cut the share going to primary-market investing and raised the share allocated to OTC transactions, liquid secondary markets, and incubation.
The firm tied that move to a broader structural view: crypto is changing from a trading market into internet-native financial infrastructure. IOSG described that shift in four layers.
- First, Better Money and Better Rails. Stablecoins have already shown that better money and better settlement rails can become internet-native before the traditional system does.
- Second, Internet Capital Markets. IOSG said RWA and tokenization can provide on-chain dollars with clearer real yield and collateral.
- Third, mass-market applications. The firm said it believes crypto can produce the next ByteDance or the next Pinduoduo, just as the internet industry did.
- Fourth, AI Agent × Crypto. As financial infrastructure becomes internet-native, the end users will not just be humans. Agents will need wallets, payments, identity, and programmable ownership too.
IOSG’s view was simple: once money and assets move on-chain, value will pile up at the application and interface layers, and AI agents will run on the same infrastructure as humans.
Why IOSG thinks the best investments appear in bear markets
IOSG said the best trades and investments often show up in bear markets because quality is often mispriced while real revenue has a way of proving itself.
It boiled that logic down to three points. First, valuation dislocation. When sentiment is at its ugliest, projects with real value can trade below intrinsic value, and the best entry prices show up when everyone else is heading for the exit. Second, real revenue survives. IOSG said it prefers businesses with verifiable cash flow instead of pure narrative. If a project can live through a bear market with clear customers and a clear product, that strength compounds in a bull market. Third, the model has to survive scrutiny. IOSG said it only backs projects that can explain the full business model from start to finish: who pays, why they pay, and how much they pay. Revenue that can be verified from the outside is the only kind it counts as real revenue.
In this cycle, IOSG said the crypto projects that are genuinely making money range from several hundred million dollars to about $5.8 billion in scale, spread across DeFi and different infrastructure categories.
Theme one: stablecoins and payments
Circle: reserve income, distribution costs and long-term equity value
IOSG started with Circle. It said Circle’s business has three main revenue components.
The first is reserve income. About $73 billion in reserves is invested in short-dated debt, which at a 3.5% annualized rate would generate about $2.6 billion a year. IOSG said that number moves with Federal Reserve policy.
The second is distribution cost. According to IOSG, Circle shares its main revenue stream with partners such as Binance and Coinbase, with about 62% going to those partners. That leaves Circle with a gross margin of 38%.
The third is the long-term equity value of the underlying platform. IOSG said Circle has built its own chain, CCTP cross-chain infrastructure, and developer APIs, though those businesses currently make up only about 6% of revenue.
IOSG said it built a discounted cash flow model for Circle that begins with stablecoin float, turns that through yield into reserve income, applies the 38% gross margin to derive stablecoin gross profit, and then uses a 15x multiple in year three with a 20% discount rate to estimate present value per share.
fun.xyz: a Stripe-like checkout layer for crypto
IOSG described fun.xyz as a Stripe-like checkout layer for crypto. It said the product offers a universal deposit address, or UDA, and that all money entering Polymarket flows through it. IOSG added that it is also an investor in the project.
RedotPay: a crypto card built for everyday spending
IOSG then pointed to RedotPay, calling it the most popular crypto payment card on the market. The card can be used anywhere Visa and Mastercard are accepted, which IOSG said brings crypto into real-world consumer spending.
The figures cited in the talk were these: more than 5 million cards issued cumulatively, global availability, about $3 billion in TPV, a market lead of 4x, and annualized revenue of about $150 million. Based on those numbers, IOSG said products that combine payments with stablecoins, including companies such as RedotPay, are moving toward the mass market and have already found acceptance.
Theme two: prediction markets
IOSG said prediction markets are moving into the mainstream. Its framing was blunt: niche products become mass products, and the future of niche products becomes the future of mass products. In its view, this is part of crypto’s cold-start path toward large-scale adoption.
It cited two market leaders. Polymarket posted $26.2 billion in trading volume in the first quarter of 2026, up 90% quarter over quarter. During the World Cup period, from June 11 to July 19, volume topped $15 billion. IOSG said Polymarket stands out because of its global reach and non-custodial structure, making it one of the best examples of next-generation crypto applications.
Kalshi, by contrast, took the regulated route. IOSG said Kalshi secured a federal license, recorded about $32.1 billion in trading volume in the first quarter of 2026, and distributes through Robinhood and Interactive Brokers. The firm added that Kalshi was founded in 2018, spent years dealing with skepticism, survived the bear market, obtained its license, and produced one of the steepest revenue curves IOSG has seen in U.S. fintech.
Theme three: AI × crypto
On AI and crypto, IOSG said the market spent the last five years obsessed with model quality, asking whose Transformer was better and whose RLHF was smarter. The more important questions now, it argued, are where compute comes from, where data comes from, and how money moves inside AI systems.
On compute, IOSG said crypto has already shown that open networks can coordinate hardware resources on a global scale. It pointed to Ethereum’s proof-of-work era, before the 2022 Merge, and said the network’s aggregated GPU compute was on the scale of a frontier training cluster. IOSG stressed that this does not mean miners’ GPUs can be directly repurposed to train frontier models. That is not the claim. The point, it said, is that token incentives can aggregate idle hardware spread around the world. If that mechanism is applied correctly to AI compute markets, IOSG sees a real opportunity.
On data and the movement of money, IOSG pointed to agent banking models and then gave several examples.
Grass: bandwidth sharing and AI training data
IOSG said Grass has about 8.5 million users who share unused bandwidth through a browser extension and app in exchange for points. Its network layer distributes scraping tasks from AI labs to those nodes, then cleans and structures web data into enterprise-grade datasets.
The key architecture, IOSG said, is that Grass can route demand from AI buyers such as OpenAI and Anthropic, companies willing to pay for training data, to on-chain users and then reward those users with tokens or revenue. Grass now has more than 250 PB of data, according to the talk. IOSG also cited a business model with hard numbers: about $17 million in revenue in 2025 and more than $70 million expected in 2026.
To IOSG, that shows tokenized crypto projects can already be very real businesses, with revenue, cash flow, and customers willing to pay. One of its investment approaches in this area is to start with toB and then move to toC.
Hyperbolic and Nous Research
IOSG also said Hyperbolic is another portfolio company focused on inference and GPU compute markets. More than 250,000 developers are building on the platform, and its customers include several frontier AI labs.
The third example was Nous Research, which IOSG described as a representative case of a crypto-native project moving into AI. It also referenced Hermes, known in the talk as “Lobster,” as a product many people already use. The speaker said there was not enough time to go deeper into the technical stack.
Theme four: on-chain trading and credit
Collector Crypt: an on-chain pawn shop and card store
IOSG then moved to on-chain trading and credit. It described Collector Crypt as an on-chain mix of a pawn shop and a card store. By revenue, IOSG said, it is already one of the top two applications on Solana.
The model was broken into three steps. First, on the supply side, the platform buys and custody-holds physical cards in a vault. Second, it tokenizes them on-chain so each card becomes a tradable token that can be redeemed at any time. Third comes monetization and exit.
IOSG said Collector Crypt has generated more than $1 billion in cumulative trading volume and has 4 million monthly active users. By daily revenue, it is one of the largest applications on Solana. Protocol revenue was about $7.2 million in April, $9 million in May, $15 million in June, and $12 million in July. At that scale, IOSG said, annual revenue this year could exceed $200 million. It presented the project as a case with real revenue, a token already in circulation, and clear demand.
Hyperliquid: a buyback flywheel powered by fees
IOSG also talked through Hyperliquid and why some people say it is “eating Binance.” In plain English, the firm said, Hyperliquid can be understood as a decentralized Binance for futures trading, built around a self-reinforcing buyback flywheel. Every trade pays a fee, and about 97% of those fees are used to buy back the token. More trading creates more fees. More fees create more buybacks. Then the loop starts again.
IOSG’s edge: global reach and research depth
Near the end of the talk, IOSG explained why it thinks it is well placed to find these opportunities. The firm said it has strong access to global opportunities, with most of its portfolio spread across East and West, North America and Asia. It also said it has repeatedly identified the core paradigm of each cycle early.
The thing underneath that process, IOSG said, is research. Deep research is its investment moat.
Closing view: the bear market is the starting point for positioning
IOSG closed with a simple argument: the best investment opportunities are often buried inside the worst sentiment. It highlighted one timing view in particular: according to “Bitcoin Divine Power,” Bitcoin could reach a low point around the end of October this year. Based on that, IOSG said investors who shifted their attention to AI or U.S. equities may want to take another look at new opportunities in crypto.
The firm said it is now focused on three kinds of opportunities:
- Projects with real revenue. Stablecoins, payments, and AI-related crypto businesses are producing new and verifiable cash flow.
- Businesses that have been wrongly punished in this winter. IOSG said many projects still have solid fundamentals but are being priced as if a bear market that is already about 90% complete should define them.
- Early identification of winners. IOSG said its contrarian, research-driven investing across three cycles has one goal: identify the winners before the next bull market arrives.
Its final line was direct: the bear market is the starting point for positioning.
