When Crypto "Hides" in Traditional Finance: How Prediction Markets, Stablecoins, and Tokenized Stocks Are Going Mainstream

For a long time, when the crypto industry talked about "mainstream adoption," it usually pointed to a few familiar metrics:

For example, how many people hold Bitcoin, how many addresses interact with on-chain protocols, and how many users have started using wallets, exchanges, and DeFi.

This implies a relatively linear assumption: ordinary users first need to understand Crypto, then purchase crypto assets, create a wallet, and eventually step into the on-chain world.

But recent changes may be reversing this path. Users don't necessarily need to understand blockchain before they start using crypto infrastructure; instead, pre-existing demands like prediction markets, cross-border transfers, and stock trading are actively absorbing crypto technology. These seemingly belong to three different tracks, and the penetration doesn't happen along the same path, but they all point to the same shift:

Crypto is evolving from a new financial system that users need to actively enter into infrastructure that traditional finance and mainstream applications can directly leverage.

1. Prediction Markets: From On-Chain Event Trading to Probability Pricing Tools

As we all know, prediction markets are not a new concept.

Especially in the crypto world, as early as the initial development of Ethereum, the prediction market Augur was the first DApp on Ethereum, and it initially validated that any event whose outcome can be objectively verified could be turned into an on-chain contract, projecting the market's judgment of the future through buying and selling real funds.

However, for a long time afterward, prediction markets were simply labeled as "on-chain gambling" and never truly broke out of the crypto-native circle. Early users of platforms like Polymarket were indeed mainly crypto-native groups familiar with wallets, stablecoins, and on-chain trading:

On one hand, the barriers to using wallets, stablecoins, and on-chain trading limited ordinary users from participating. On the other hand, even though Polymarket once broke through to the mainstream with events like the U.S. Presidential Election, its core participants were still primarily traders familiar with Crypto.

But the 2026 FIFA World Cup in the US, Canada, and Mexico provides a more mainstream observation window for prediction markets (for further reading, see "World Cup Frenzy, Prediction Markets Step Up: How is Polymarket Prying Open the Door to Mainstream Adoption?").

Compared to monetary policy, economic data, and political elections, football matches require almost no additional knowledge. Who will advance from the group stage, which teams will reach the semi-finals, whether a particular player will become the top scorer – these are questions that fans discuss every day.

What prediction markets do is merely convert these scattered opinions into a price that can change in real-time. This is why, for prediction markets to truly break through to the mainstream, a change in the regulatory environment is not enough. They also need a sufficiently large and intuitive public event, and the World Cup perfectly meets this condition.

Many of Crypto's past breakthrough moments occurred at the intersection of "high-knowledge-barrier technology" and "low-knowledge-barrier scenarios." For instance, NFTs broke through because they tied on-chain assets to avatars, art, and community identity. Memes spread quickly because they compressed complex financial behaviors into simple emotions and cultural symbols.

Similarly, the entry point for prediction markets to reach a wider user base may not be macroeconomic data or complex political contracts, but rather scenarios like sports, entertainment, and events that the public is already willing to discuss.

The World Cup is unique because it naturally possesses three conditions.

• First, it enjoys broad global consensus. Even non-hardcore fans can understand basic questions like who wins, who loses, who advances, and who will be champion.
• Second, it has a high-frequency information flow. Pre-match lineups, player form, injury reports, tactical changes, and the match process itself continuously alter market expectations.
• Third, it has a strong social aspect. Watching a game is not an isolated activity; it comes with group chats, sharing, discussions, debates, and emotional resonance.

At the same time, the competitive boundaries of prediction markets are constantly expanding. Recently, it's become increasingly evident that they are no longer confined to vertical platforms like Kalshi or Polymarket but are also being integrated into traditional brokerages, crypto trading platforms, and even media products.

The reason is not complicated. Although traditional financial markets already possess numerous risk pricing tools like options, futures, and interest rate swaps, these products usually have a high entry barrier for understanding, making it difficult for ordinary users to directly read market judgments from prices. Prediction markets, on the other hand, compress complex issues into a more intuitive probability.

This is also key to prediction markets potentially becoming part of traditional financial infrastructure. They offer not just another way to bet, but a low-barrier, real-time updated expectation pricing tool.

Of course, this path still comes with significant controversy.

How events should be defined and settled, whether insiders can participate, whether trading financial event contracts constitutes insider trading, and whether sports contracts should be regulated by federal derivatives or state gambling authorities remain unclear. As the market grows, some Wall Street institutions have begun restricting employees from trading prediction markets involving economic data and corporate events.

Nevertheless, the process of prediction markets gaining mainstream recognition is also the process of them gradually transforming from "open event trading experiments" into financial market infrastructure.

2. Stablecoins: From Crypto Assets to Payment and Settlement Infrastructure

If prediction markets are about bringing a crypto-native product into the mainstream, then stablecoins are on a different path, gradually becoming hidden behind traditional payment products.

For most crypto users, stablecoins have long served as a medium of exchange. Users buy and sell other tokens with USDT or USDC, transfer funds between exchanges, or deposit them into DeFi protocols for yield. Consequently, their issuance scale has long been seen as the primary metric for measuring stablecoin competitiveness.

But entering the next phase, the competitive focus for stablecoins may no longer be just on-chain supply, but rather who can secure compliant positions earlier and penetrate real-world scenarios like payments, settlement, and cross-border transfers.

One of the most discussed cases recently is the Open Standard, involving over 140 payment, banking, tech, and crypto enterprises, launching Open USD.

Unlike the traditional model where a single issuer primarily controls reserve yields, Open USD allows partner enterprises to mint and redeem for free, with plans to distribute income generated from reserves to partners driving its usage, after deducting management fees.

Introductions by Visa and Stripe also define OUSD as shared infrastructure for global capital flows. What's truly noteworthy about this design isn't just another dollar stablecoin entering the market, but its attempt to adjust the long-standing profit distribution model of stablecoins –previously, issuers typically captured most of the yield from reserve assets, while wallets, exchanges, payment companies, and fintech platforms bore the costs of user acquisition, product integration, and actual distribution.

If reserve yields can be more heavily weighted towards channels and usage scenarios, the competitive logic for stablecoins will also change. This explains why the entry of institutions like Stripe, Visa, Mastercard, and Zelle is more significant than simply adding another on-chain asset.

Ultimately, stablecoins are transforming from a Crypto product requiring active user holding and management into a capital movement component that traditional businesses can directly leverage. Users might see a cross-border remittance, merchant settlement, corporate payment, payroll disbursement, or a payment card, while the backend could be using stablecoins and public chain settlement networks. Users don't even need to know stablecoins exist to utilize their settlement capabilities.

Meanwhile, some stablecoin products lacking actual distribution channels and usage scenarios are exiting the market. This further illustrates that completing an issuance doesn't automatically confer value to a stablecoin.

As the underlying technology becomes standardized, the real moat will increasingly come from licensing and regulatory compliance capabilities, as well as the ability to embed into a commercial scenario that generates continuous transactional demand.

This also means that in the future, stablecoins' ultimate competition may not just be against other stablecoins, but potentially against card networks, cross-border remittance systems, bank deposits, and corporate treasury infrastructure.

3. Tokenized Stocks: Traditional Assets Enter On-Chain Accounts

Compared to prediction markets and stablecoins, tokenized stocks represent a more direct direction of integration.

It's not about introducing a crypto product to traditional users, but about bringing stocks, ETFs, funds, and other traditional assets into accounts primarily designed for holding and trading crypto assets.

In the past six months, almost all major crypto trading platforms have been racing to enter this space. Simultaneously, ICE, the parent company of the New York Stock Exchange, strategically invested in OKX, with plans to collaborate on regulated crypto futures in the US, ICE market products, and tokenized stocks related to the NYSE. As of writing, OKX has just announced plans to launch tokenized US stock products.

From a market structure perspective, this collaboration carries strong symbolic meaning. Previously, crypto exchanges tried to provide users with exposure to stock prices through synthetic assets, perpetual contracts, or third-party issuers. Now, the operators of traditional exchanges are directly participating in product design, price data, compliance, and on-chain market infrastructure development.

On the user-facing front, similar changes are underway. Beyond vertical applications,from trading platforms to wallets to on-chain DEXs, from Robinhood to Interactive Brokers, everyone is trying to evolve into comprehensive financial accounts capable of handling crypto assets, stocks, and even commodities trading.

However, tokenized stocks are also the most prone to conceptual confusion.

A token with a name containing "Apple," "Nvidia," or "Tesla" does not necessarily equate to the user directly holding the common stock of the corresponding company. Different products may represent direct ownership of the actual stock, beneficial interests held via an SPV, debt instruments promised by an issuer, or simply derivatives tracking the stock price.

These models can have significant differences regarding dividends, voting rights, redemption rights, bankruptcy remoteness, and investor protection. Even if the token circulates on a public chain, the legal relationship determining the user's ultimate rights often still resides in off-chain issuers, custodians, and legal contracts. Currently, most RWA systems use a hybrid architecture.

Therefore, tokenization does not automatically equate to liquidity, nor does it automatically grant users the exact same rights as traditional shareholders. However, these limitations do not prevent tokenized stocks from becoming an important gateway.

Once issues surrounding compliance, custody, and shareholder rights are progressively resolved, stocks will no longer only exist in brokerage accounts. They can reside in the same on-chain account as stablecoins, be broken down into smaller units, trade across different regions and time zones, and potentially be used for collateral, lending, automated investing, and programmatic asset allocation.

At that point, wallets and trading platforms will no longer just compete on storing and trading crypto assets, but on who can become the unified gateway for users to manage their global assets.

Final Thoughts

To be honest, this is a bit like when Zhang Sanfeng taught Zhang Wuji Tai Chi in the novel "The Heaven Sword and Dragon Saber," repeatedly asking him how much he remembered. Only when Zhang Wuji replied that he had forgotten everything did he truly grasp the essence.

The mainstreaming of crypto may undergo a similar process. The true sign of maturity is not that everyone remembers the concepts of blockchain, wallets, and stablecoins, but that users gradually become unaware of the existence of these technologies, letting Crypto's mechanics fade behind the product.

Of course, looking closely, the ways crypto technology enters traditional finance differ across prediction markets, stablecoins, and tokenized stocks:

• Prediction markets bring the product logic forged in the crypto world into the mainstream market, converting events and uncertainty into probabilities tradeable in real-time;
• Stablecoins embed on-chain settlement capabilities into payments, remittances, and corporate capital flow, allowing users to leverage a new financial network without understanding blockchain;
• Tokenized stocks bring traditional assets into on-chain accounts, allowing wallets, exchanges, and public chains to gradually become new channels for the issuance, trading, and settlement of traditional securities.

These correspond to penetration at the product, capital, and asset levels respectively. For the industry, this might signify a new path to mainstream adoption: no longer requiring every user to become a Crypto user first, but having on-chain technology proactively adapt to the financial needs users are already familiar with.

Correspondingly, the role of the wallet will also change.

After all, when a wallet no longer contains just native tokens and NFTs, but gradually includes stablecoins, stocks, funds, commodities, and event contracts, it needs to handle not just private keys and on-chain balances, but also how to lower the barrier to using different assets and better connect on-chain and off-chain account systems.

Imagine a person using imToken to send money instantly to relatives overseas, trade the probability of an event occurring on imToken, or buy a small portion of a US stock. They might not necessarily think they are "using Crypto."

It is precisely in this state, where it no longer needs to be repeatedly emphasized, that crypto technology can truly transition from a relatively isolated niche market into the broader financial and commercial world.