Last updated on March 6th, 2026 at 10:03 am
Institutional investors are accelerating their push into crypto, but industry veteran Meltem Demirors argues the shift is less about supporting the crypto economy and more about capturing new fee streams.
In a recent post, Demirors said large asset managers are not entering digital assets to buy tokens outright, but to wrap them into regulated products that generate recurring revenue. She pointed to the rapid rise of exchange-traded funds and tokenized funds as evidence that traditional finance is turning crypto into an asset-gathering machine.
— Meltem Demirors (@Melt_Dem) February 23, 2026
ETFs and stablecoins drive fee growth
The launch of BlackRock’s spot Bitcoin ETF, IBIT, marked a turning point. The fund surged to roughly $100 billion in assets within 18 months, becoming one of the fastest-growing ETFs on record. Analysts estimate the product now generates hundreds of millions of dollars annually in fees.
Demirors noted that stablecoin issuers are also major profit centres. With about $300 billion in stablecoins outstanding, including dominant shares from Tether and Circle, interest income from reserves has become a multibillion-dollar revenue stream.
She added that tokenized money market funds and other on-chain products are increasingly structured to fit within traditional custody and compliance frameworks, allowing asset managers to absorb crypto capital into existing portfolios.
On-chain capital becomes AUM target
Decentralized finance currently holds roughly $90–100 billion in total value locked across major networks. Demirors warned that this capital, alongside large crypto treasuries, is becoming a target for firms seeking new assets under management.
Rather than replacing traditional finance, she said crypto risks becoming another distribution channel for it. The long-term outcome, she argued, depends on whether crypto-native institutions can scale quickly enough to retain economic value on-chain rather than ceding it to established financial players.
In another crypto adoption development, more than half of the largest banks in the United States have either launched Bitcoin-related services or disclosed plans to do so, signalling a sharp shift in Wall Street’s stance toward digital assets, according to Bitcoin financial services firm River.
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