Bitwise CIO: Everyone has overlooked Coinbase's true ambitions.

Author: Matt Hougan, Bitwise CIO

Compiled by: AididioJP, Foresight News

Original Title: Bitwise CIO: Why We All Underestimated the New Listing Platform Launched by Coinbase?

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

So far, we can cite three areas that have made tangible progress:

• Bitcoin is reshaping gold's anti-inflation properties. Stablecoins are reshaping the US dollar.
• Tokenization is reshaping trading and settlement

Although these changes are still in their early stages, the trend is already quite evident. 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 opportunities worth trillions of dollars, enough to drive the cryptocurrency market into a bull market lasting a generation. But this Monday, we welcomed the fourth important area: capital formation. I believe this will become a key theme in the cryptocurrency space in 2026.

Next, I will explain what specifically happened, why this matter 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 job opportunities.

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

Institutional capital flows 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. When they eventually go public, the shares are primarily sold to other institutional investors. Ordinary investors can only participate at the final stage. This system is costly and heavily regulated, resulting in a significantly lower number of IPOs today than in the past.

Cryptocurrency attempted to change this situation in 2017 and 2018 with the initial coin offering (ICO) boom. ICOs allowed ordinary people to invest before a project went public, directly connecting entrepreneurs and retail investors.

But to be honest, the result was simply a disaster.

Due to the lack of regulation, the vast majority of ICOs ultimately proved to be scams. Fraudsters raised billions of dollars from unsuspecting members of the public and then absconded with the funds. 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 craze and ushered 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, which fully exposed the black box issues in the cryptocurrency field. However, a small minority saw potential in it.

Despite the numerous issues surrounding ICOs, it has proven one thing: cryptocurrencies can quickly raise funds for new projects. Compared to the high costs, cumbersome procedures, and wealth bias of traditional IPOs, ICOs are indeed cheaper, faster, and more equitable.

Paul Atkins, the current chairman of the U.S. Securities and Exchange Commission, is one of those who sees this potential. His support for ICO-type 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-type 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 version 1.0, we can expect a surge in capital formation led by cryptocurrencies.

This Monday, Coinbase took an important step in that 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, while also providing project teams with new avenues for financing. Coinbase will enforce strict standards, including background checks on the team, 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 the scale is still small compared to the traditional IPO market, there were 176 IPOs in the U.S. in 2024, raising a total of $33 billion. However, the success of these ICOs will prove that entrepreneurs can indeed raise funds directly from investors and often under better conditions than traditional IPOs.

Over time, I believe that more and more projects will choose the direct ICO model instead of traditional funding paths.

I have a few thoughts on how to invest on this topic:

If my judgment is correct, the most direct investment target is Coinbase. This company is leveraging its dominant position in the cryptocurrency trading field to explore new markets. It is not only the Charles Schwab of the crypto world but also a composite 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.

Looking at it more broadly, the revival of ICOs will be another significant milestone in the cryptocurrency space. Today's cryptocurrencies have more potential than a few years ago, as we now have stablecoins and the story of tokenization. Coupled with the billions of dollars in financing achieved through ICOs, this narrative becomes even more compelling. This trend tells us that we should make a wider market layout: for example, investing in index funds that contain a basket of crypto assets or crypto stocks. In other words, don't get caught up in choosing which horse to back; instead, bet that the whole race will get better and better.

The competition is becoming more and more exciting.