I’ve been trading crypto since 2013.
Back then, if you wanted exposure, you had to really want it.
There were no Bitcoin ETFs. There were no Ethereum ETFs. There were no leveraged crypto products.
There were no publicly traded treasury companies buying digital assets by the billions.
There wasn’t a convenient brokerage account solution sitting right next to your stocks and ETFs.
You had to go get it. And it wasn’t always easy.
Every cycle seemed to introduce more complexity, like new exchanges, new wallets, new blockchains, and new tokens.
Then came DeFi and entirely new ways to transact. Then came NFTs.
Then came a thousand different ways to participate, each requiring investors to learn a whole new system.
Meanwhile, traditional finance stayed over here, and crypto stayed over there.
Two completely different worlds… or at least that’s how most people saw it.
They Were Always More Stocks to Me
For years, I probably looked at crypto differently than most investors.
I never really put it on a pedestal. To me, it’s just more stocks.
Maybe software stocks, maybe technology stocks, maybe something entirely new.
But from an investor’s perspective, it simply means more opportunities.
The only difference was that you had to go out of your way to buy them.
Most people disagreed. And, to be fair, they had a point.
The practical reality was that traditional assets and crypto assets lived in different universes, different exchanges, different custody solutions, different regulations, and different participants.
If you wanted stocks, you went one direction. If you wanted crypto, you went another.
But look around today.
Bitcoin ETFs trade alongside your index funds. Ethereum ETFs trade alongside your technology stocks.
Options trade on top of those ETFs. Leveraged products trade on top of those ETFs.
Public companies are buying crypto assets and turning themselves into treasury vehicles.
Investors can gain exposure to entire ecosystems without ever touching a wallet.
This cycle feels completely different because the barriers that separated these worlds are disappearing.
And they’re disappearing fast.
The Blur Works Both Ways
What’s fascinating is that the convergence isn’t just happening in one direction.
For years, crypto moved closer to traditional finance. Now traditional finance is moving closer to crypto.
That’s the part everybody’s missing.
The conversation has shifted from tokenizing crypto assets to tokenizing everything – stocks, bonds, commodities, real estate.
Pretty much anything that can be owned, transferred, settled, or traded.
The infrastructure already exists. In many cases, tokenized versions of traditional assets are already trading on-chain today.
The technology has already proven itself. Now the largest financial institutions on Earth are figuring out how to adopt it.
What cryptocurrencies really did was build the rails first.
They showed the rest of the financial world what faster settlement, greater transparency, and around-the-clock markets could look like.
Now the institutions are laying their own tracks on top of those same ideas.
The line between traditional finance and decentralized finance isn’t getting blurry.
Follow the Trend
As investors, I think we need to be careful not to get distracted by labels.
People love arguing about whether something is a stock, a token, a blockchain project, a financial technology company, or something else entirely.
I don’t find those debates particularly useful. What I care about is where the money is going.
The trend is obvious. The largest banks in the world are investing in this transition.
The biggest exchanges are investing in this transition. The largest asset managers are investing in this transition.
The regulators are increasingly creating frameworks around this transition.
And entrepreneurs are building the infrastructure that will power it.
There will be winners everywhere.
Some will come from traditional finance. Some will come from crypto. Some will come from technology.
The biggest winners might end up being the companies that sit right in the middle, the ones building the bridges while everybody’s arguing about which side they’re standing on.
I’ve spent more than a decade watching these two worlds move closer together.
Today, it feels like they’re finally becoming the same world.
The line isn’t getting blurry anymore.
The line is gone.
This Week in Everybody’s Wrong
On Monday, we talked about the bond market.
It’s always a good time to talk about the bond market.
Here’s what global yields (and energy stocks) tell us about inflation.
On Tuesday, we explained that the market doesn’t care how you think information should be weighted.
It doesn’t matter whether it’s war, interest rates, inflation, or earnings.
Remember: Price is the collective wisdom of the marketplace, and price is the only thing that pays.
On Wednesday, we showed you that the average stock has never been stronger.
The equal-weight S&P 500 just closed at an all-time high, so did the equal-weight Nasdaq 100, and same thing for the equal-weight Dow Jones Industrial Average
This is what’s happening while everybody’s watching Nvidia.
On Thursday, we reminisced about childhood and the things we used to do for our great-grandmothers.
I used to dream about a robot making us coffee.
Seems like my Tata and I were only about 40 years early.
On Friday, we looked at the past for insight into the present again.
It’s like markets have never gone completely insane then immediately destroyed everyone who showed up late to the party.
But gold has done this movie before.
On Saturday, Grant Hawkridge reflected on another visit to the Northern Hemisphere.
Our man Down Under is all about solving problems and identifying opportunities.
Right now, too many people are focused too much on problems and not enough on opportunities.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs