The Next Big Disruption From Crypto

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By Matthew Hougan

I caught a glimpse of the future this week.

A meta thesis for investing in crypto is that it is going to reinvent the fundamental aspects of finance.

So far, you can point to three examples where we’ve had real traction:

• Bitcoin >> Reinventing gold
• Stablecoins >> Reinventing dollars
• Tokenization >> Reinventing trading and settlement

We’re early in each of these disruptions, but you can see the writing on the wall. I expect that eventually most assets will be tokenized, most dollars will move on stablecoin rails, and bitcoin will be as widely accepted as gold.

These are each multitrillion-dollar opportunities, and enough to power a bull market in crypto for a generation. But this week—on Monday, to be precise—we added a fourth category: capital formation. I think it will be a defining theme of crypto in 2026.

In this piece, I’ll explain what happened, why it’s such a big deal, and how to invest in it if I’m right.

First, a Bit of History

Capital formation is one of the most important things we do in finance. It is the process through which entrepreneurs raise money, start new businesses, build products, and create jobs.

The current system, unfortunately, is both sclerotic and heavily skewed against individual investors.

Institutions fund the largest VCs, which invest in the best startups. These startups stay private for years, amassing value for early shareholders. When they finally IPO, they sell shares to other institutional investors. Retail only gets to participate at the end of the journey. The system is costly and burdened by seemingly infinite regulations, which is why the number of IPOs is down sharply from previous eras.

Crypto tried to reinvent capital formation in 2017/2018 during the Initial Coin Offering (ICO) boom. ICOs let individuals invest in new crypto projects before they were public, directly connecting entrepreneurs with retail investors.

It was—let’s be honest here—a complete disaster.

With no regulations in place, the vast majority of ICOs turned out to be scams. Charlatans raised billions from the unsuspecting public, only to abscond with their wealth. Things got so bad that the SEC had to step in, threatening to jail promoters. Its massive crackdown in 2018 destroyed the ICO trend and drove crypto into a deep bear market.

So, What's Changed?

Most people who watched the ICO boom of 2017-2018 saw it as a failure—an example of everything that was wrong with crypto. But a few looked at the same events and saw possibilities.

As bad as ICOs were, they did prove something interesting: Crypto could be used to raise capital rapidly for new projects. Whereas the traditional IPO route featured high fees, big procedural hurdles, and a tendency to distribute rewards to the wealthiest, ICOs were lower-cost, faster, and more egalitarian.

One of the people who saw this possibility was the now-SEC Chairman Paul Atkins. Atkins’ affinity for ICO-like projects should not be surprising: Before joining the SEC, he was co-chair of the Token Alliance, a crypto advocacy group pushing to reimagine ICO-like tokens. He also served on the board of Securitize, a company focused on tokenization.

In July, Atkins gave a speech calling for new regulations and safe harbors that would allow high-quality ICOs to happen. If we can fix what went wrong with ICOs 1.0, Atkins argued, we could see a boom in new capital formation—all led by crypto.

On Monday, Coinbase took the first major step toward making this a reality, announcing the debut of its new ICO platform. Going forward, Coinbase will debut one fully-vetted crypto project on its ICO platform each month. It will allow investors the opportunity to access new projects prior to launch, and allow projects to tap into a new source of investing capital. Coinbase will enforce key requirements, including vetting teams, requiring disclosures, and ensuring that insiders cannot sell tokens for six months following the launch.

In short, through self-regulation, it aims to fix a lot of what was wrong with the 2017-2018 ICO era.

A Prediction and What It All Means

I bet we’ll see a half-dozen or more billion-dollar ICOs through platforms like Coinbase in 2026. That’s a small fraction of the amount of money that is raised through the traditional IPO market; for context, in 2024 there were 176 IPOs in the U.S., raising a collective $33 billion.

But I suspect many of these new ICOs will be successful and will prove that entrepreneurs can raise capital directly from investors, often at better terms than they would in the traditional IPO market. Over time, I’d expect more and more projects will lean toward the direct ICO model over the traditional model.

As far as how to invest in this theme…a few quick thoughts.

If I’m right that this is a big deal, the obvious investment is in Coinbase, which is using its dominant position in U.S. crypto trading to enter new markets. It’s not just the Charles Schwab of Crypto; it’s Charles Schwab + Goldman Sachs + NYSE + …

I also anticipate a healthy ICO market will bode well for the largest programmable blockchains, like Ethereum and Solana, as many ICOs will likely be for applications built there.

But more broadly, I think of an ICO renaissance as another major proof point for crypto as a whole. Crypto is more interesting today than it was a few years ago because we’ve added stablecoins and tokenization to its story. If we start seeing billions more raised through rapid ICOs, that story will only get stronger. This dynamic calls for investing more broadly in the market; think diversified index funds holding a basket of crypto assets or crypto equities. In other words, don’t try to pick the horse; bet on the race.

If the last week has taught me anything, it’s that this race is only getting more interesting.

Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

Trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. In addition, crypto asset markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

Crypto asset trading requires knowledge of crypto asset markets. In attempting to profit through crypto asset trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial crypto asset trading. Crypto asset trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price.

The opinions expressed represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events, or a guarantee of future results, and are subject to further discussion, completion and amendment. The information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice, or investment recommendations. You should consult your accounting, legal, tax or other advisors about the matters discussed herein.