Wintermute: By 2026, crypto had gradually become the settlement layer of the Internet economy

Original Title: Digital assets in 2026: The clearing layer for the internet economy

Original Source: Wintermute Ventures

Original Translation: Deep Tide TechFlow

Introduction: For decades, the internet has enabled information to flow freely across borders, platforms, and systems. However, value has lagged behind. Money, assets, and financial protocols still flow through fragmented infrastructure built on traditional rails, national boundaries, and rent-seeking intermediaries at each node. Wintermute Ventures believes this gap is rapidly closing at an unprecedented pace, with crypto becoming the clearing and settlement layer long needed by the internet economy.

The report focuses on five key themes: Everything is Tradable (prediction markets, tokenization), Stablecoin Interoperability, Tokenomics returning to fundamentals, DeFi merging with TradFi, and Privacy becoming a regulatory driver. Infrastructure maturity is the common thread of this transformation.

Full Text:

For decades, the internet has allowed information to flow freely across borders, platforms, and systems. However, value has lagged behind. Money, assets, and financial protocols still flow through fragmented infrastructure built on traditional rails, national boundaries, and rent-seeking intermediaries at each node.

This gap is rapidly closing at an unprecedented pace. This has created an opportunity for infrastructure companies directly replacing traditional clearing, settlement, and custody functions. Infrastructure that enables value to flow as freely as information is no longer theoretical. It is being built, deployed, and massively utilized.

For years, crypto has existed on-chain but disconnected from the real economy. This is changing. Crypto is becoming the clearing and settlement layer long needed by the internet economy; an operational, transparent, and decentralized layer free of gatekeepers' permission.

The following themes represent the direction we believe digital assets will take in 2026 and are areas Wintermute Ventures actively supports founders in.

1. Everything is Tradable

More and more assets and real-world outcomes are becoming tradable through new financial primitives, including prediction markets, tokenization, and derivatives. This transformation provides a liquidity layer for domains that historically had no market.

Tokenization and synthetic assets bring liquidity to known assets. Prediction markets further price things that were previously unpriceable, turning raw information into tradable instruments.

Prediction markets continue to expand, serving both as consumer products and as new financial instruments enabling hedging, outcome-linked trades, and views on granular events. They are also beginning to replace parts of traditional financial infrastructure.

Insurance is a notable example: outcome-based markets can offer cheaper and more flexible hedging than traditional insurance or reinsurance by pricing specific risks directly rather than bundling them into broad products. Users can hedge specific wind speeds at specific locations during specific time frames rather than buying hurricane insurance covering a region. Over longer time horizons, these specific risks can be manually curated by agent workflows and bundled into individuals' unique needs.

As prediction market infrastructure scales, entirely new categories of data products have emerged around formerly unpriced topics. We anticipate markets designed to trade and quantify objective perceptions, sentiments, and collective opinions. These emerging markets are a natural extension of decentralized finance, unlocking new ways to price and exchange information itself. As everything becomes tradable, the infrastructure providing liquidity, enabling price discovery, and ensuring settlement becomes crucial.

This structural shift will concentrate value at the infrastructure layer, directly impacting how we allocate capital. We are actively supporting teams building core market and settlement infrastructure, data layers for validation and attestation, and new data products supporting the securitization of previously untradable outcomes. We are also focused on novel abstract models making these markets programmable and composable, embedding them into real-world workflows and replacing parts of traditional financial and insurance infrastructure.

2. Stablecoins as a Trust Layer, with Banks Handling Intermediation

Digital assets lack robust settlement banks and clearinghouse equivalents that grease the wheels of traditional finance. Stablecoins achieve open access and programmable value, but without settlement infrastructure, fragmentation introduces adoption-limiting friction.

As stablecoin issuers proliferate across different ecosystems with varying collateral models, the need for interoperability layers capable of reliably composing these assets is growing. To scale this system, crypto needs infrastructure capable of achieving net settlement, conversions, and finality across stablecoins and chains without introducing additional credit risk, liquidity risk, or operational overhead.

The missing abstraction is addressed by asset-backed interoperability shifting conversion and credit risk to stablecoin issuers based on their balance sheets, instead of forcing end-users to manage FX, routing, or counterparty risks in cross-stablecoin trades. We view this as the on-chain equivalent of correspondent banking, settling in seconds, offering open access to application builders, and expect to see more companies positioning themselves as coordinators between issuers and applications.

3. The Market Will Reward Long-Term Revenue over Short-Term Incentives

Tokens with unsustainable business models driving growth are becoming less effective. Companies relying on subsidizing users or liquidity providers while operating a fragile revenue model will find it harder to compete.

Valuations will be more closely anchored to sustainable earnings and forward-looking projections, converging towards a cash flow-based framework. The short-term, volatile monthly fee run rates annualized will no longer be a trusted way to price a company, as revenue quality and incentive alignment become core to valuation. Tokens without a credible value-capture path will struggle to sustain demand beyond speculative phases.

As a result, fewer companies will launch a token at inception. Many will default to an equity-first structure, using blockchain primarily as a backend infrastructure invisible to users and investors. When tokens are used, issuance will increasingly only occur post clear product-market fit, proven revenue, unit economics, and stakeholder incentives alignment.

We see this shift as a beneficial and necessary evolution for the ecosystem as a whole. Founders can focus on building enduring businesses without prematurely prioritizing token incentives and demand. Investors can evaluate companies using familiar financial frameworks. Users get products designed for long-term value.

4. The Convergence of DeFi and Fintech

The future of finance is not DeFi or TradFi: it is the convergence of both. A dual-track architecture allows fintech applications to dynamically route transactions based on cost, speed, and yield. Groundbreaking consumer applications will resemble traditional fintech products, with wallets, bridges, and chains abstracted away. Capital efficiency, yield, settlement speed, and transparent execution define the next generation of financial products.

While the user experience merges with fintech, the industry continues to expand rapidly behind the scenes. Tokenization and highly composable financial primitives drive this growth, enabling deeper liquidity and more complex financial products.

Distribution will be more critical than owning the interface. Winning teams will build backend-first infrastructure, plugging into existing platforms and channels rather than competing as standalone apps. Personalization and automation (increasingly AI-enhanced) will enhance pricing, routing, and yield in the background. Users will not consciously choose DeFi. They will choose products that are easier to use.

5. Privacy Becomes a Regulatory Driver

Privacy is becoming the foundation for institutional adoption, shifting from a regulatory burden to a regulatory driver. Selective disclosure using zero-knowledge proofs and multi-party computation allows participants to prove compliance without exposing raw data.

In practice, this enables banks to assess credit worthiness without accessing transaction history, allows employers to verify employment without revealing salary, and enables institutions to prove reserves without disclosing positions. The tangible realization of this vision is a world where businesses no longer need to store vast amounts of data, freeing themselves from costly and burdensome data privacy regulations. New primitives such as private sharing states, zkTLS, and MPC unlock undercollateralized loans, layering, and new on-chain risk products, shifting the entire category of structured finance onto the chain, which was previously infeasible.

6. Regulation Shifts from Compliance Hurdle to Distribution Advantage

Regulatory clarity has shifted from adversarial hurdles to standardized distribution channels. While the early "permissionless" nature of DeFi remains a key innovation engine, the arrival of frameworks such as the GENIUS Act in the U.S., MiCA in Europe, and the stablecoin regime in Hong Kong has provided greater clarity for traditional institutions. By 2026, the story is no longer about whether institutions can use blockchain but how they use these guidelines to replace traditional channels for high-speed on-chain rails.

These standards will catalyze a larger wave of compliant on-chain products, regulated fiat on/off ramps, and institutional-grade infrastructure, all without mandating full centralization, thus increasing institutional participation.

Regions that combine clear rules with quick approvals will increasingly attract capital, talent, and experimentation, accelerating the normalization of on-chain value allocation in native crypto and hybrid financial products, while slower regimes fall behind.

The Internet Economy on Crypto

Infrastructure maturity is the common thread of this transformation. Crypto is becoming the settlement and clearing layer of the internet economy, allowing value to flow as freely as information. The protocols, primitives, and applications being built today are unlocking new forms of real economic activity and expanding the realm of what is possible on the internet.

At Wintermute Ventures, we support the founders building this infrastructure. We look for teams that combine deep technical understanding with strong product thinking. Teams that release solutions people truly want to use. Teams that can operate within regulatory frameworks while advancing core principles of decentralized systems. Teams building businesses designed for lasting impact.

2026 will mark an inflection point. Crypto infrastructure will increasingly fade into the background for users while becoming the foundation of the global financial system. The best infrastructure quietly empowers people without needing to draw attention.

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