HashKey Cloud × Cactus Custody Executive Dialogue: From Market Cycles and Institutional Demand to On-Chain Asset Operations

During Bitcoin Asia, HashKey Cloud and Cactus Custody jointly hosted a "Yield on Trust" themed event. At the event, Wendy, representative of Cactus Custody, and Shen Jun, representative of HashKey Cloud, engaged in an executive fireside chat.

This conversation took place at a rather interesting moment: after more than six months of dormancy, the Crypto Market suddenly "woke up" in mid-August — BTC climbed rapidly from around $62,000 to near $81,000 within a week, marking a weekly gain of over 20%.

In reality, the entire market had been quietly shifting during this period: in January 2026, the Ethereum staking queue (validator entry queue) still held only about 1.3 million ETH; just a few weeks later, by early February, the queue had surged past roughly 4 million ETH, meaning newly entering ETH would need to wait about 70 days (versus an activation time of approximately 14 hours without queuing) before actually beginning to generate staking yields. As of late August, Ethereum's network-wide staking rate had surpassed 34.7%, continuing its upward trajectory since breaking 30% in March 2025, with over 2.4 million ETH still queued for validator activation. As for stablecoins: after a regulatory-driven pullback in Q2, the global stablecoin market stabilized anew, with total market cap holding above $300 billion in August, and the adjusted annual on-chain stablecoin transfer volume reaching $41.7 trillion, with daily volume briefly exceeding $250 billion.

As the Restaking craze fades, institutional staking, stablecoins, and on-chain asset operations are quietly reshaping the industry in an "obscure corner" that retail investors rarely pay attention to.

These figures form the true backdrop of this conversation.

Panelists:

• Wendy | General Manager of Cactus Custody (custody service platform under BIT (formerly Matrixport))
• Shen Jun | Head of Business at HashKey Cloud (Web3 infrastructure service provider under HashKey Group)

I. Rational Institutional Perspectives Amidst Market Recovery

Moderator: Over the past six-plus months, hot money has been concentrated in AI and the stock market, leaving the crypto market relatively quiet. But suddenly, within about a week, the market picked up, and many are shouting "Bull market is here." As institutional veterans who have weathered multiple cycles — what have each of you been doing over the past year and a half? Does the shifting market sentiment affect your institutions' business pace?

Wendy: The timing of this event is quite delicate — if it had been held two weeks earlier, the atmosphere would have been completely different. After more than six months of downturn, this broad-based rally is indeed rare, but from my personal perspective, I'd still like to pour some cold water and encourage everyone to view this upswing rationally. I entered the industry in 2018 and have seen more than my share of ups and downs. Many say bear markets are hard to endure, but I believe bear markets are never meant to be merely "endured" — they're meant for honing internal capabilities and laying the groundwork for the next cycle.

During this period, Cactus has focused on two things: internally, refining compliance and product experience and expanding global licenses; externally, prioritizing ecosystem partnerships. The division of labor in this industry will only become more granular — no single institution can dominate the entire value chain. So we've been continuously seeking the best ecosystem partners — layering OTC, off-chain clearing and settlement, and staking yield capabilities on top of custody as the foundational infrastructure. Clients don't necessarily need to know how many partners are behind the scenes, but they will ultimately feel whether the entire system is safer, more compliant, whether products run more smoothly, and whether asset operations are more efficient.

Shen Jun: I fully agree with Wendy. The market has indeed warmed up noticeably, but from an institutional perspective, we prefer to separate short-term sentiment from long-term judgment — compared to typical bull market launch phases, there's still a gap in fundamentals, activity, and liquidity, but the industry is also far less pessimistic than before the rally, with new Builders and institutions continuously entering.

So during bear markets, we focus more on compliance building and infrastructure; when the market becomes active, we productize and standardize our capabilities based on client needs. We've never been a company that merely tracks market ups and downs — we pay more attention to capital flows: institutions are making new asset allocations through compliant channels.

That's one of our most important judgments for the coming years.

II. In the Wave of Institutionalization, What Do Clients Actually Want?

Moderator: Both of you just mentioned a critical shift — markets can alternate between hot and cold, but once institutions enter this industry, their demands on services seem increasingly specific. Shen, from your long-term experience serving clients, what's the biggest difference between institutional clients and earlier clients?

Shen Jun: In 2026, ETH Staking experienced a dramatic shift from "virtually no queue" to "nearly two months of queuing." In early January, the validator entry queue held just about 1.3 million ETH; by early February, it had surpassed 4 million, with newly entering ETH waiting nearly 70 days before actually beginning to generate yields. Meanwhile, on the exit side, virtually no one was queuing — in July, there were even consecutive days of zero exit queue. The capital behind this increasingly doesn't resemble early Crypto Native players: ETH Treasury companies, institutional investors, and staking-enabled ETF products are all entering. Morgan Stanley's ETH ETF filing directly disclosed in May that roughly 3.64 million ETH was queued at the time, with an estimated waiting period of 63 days.

So the questions institutions ask have already changed: previously it was "what's the yield rate," now they ask "when can we start generating yields, how do we address capital efficiency during the waiting period, how do custody and validators interconnect, and how do we integrate staking into asset management frameworks under compliance?" This is precisely why HashKey Cloud has upgraded from a Staking Service Provider to an institutional on-chain asset operations platform.

Retail and institutional demands operate on entirely different dimensions. Retail focuses on yields, fees, and user-friendly interfaces; institutional needs actually begin where "what happens after clicking the button" starts: asset status, whether assets remain within their own custody framework, whether funds are properly authorized, how long until Active status, and whether it can be embedded into compliance and audit systems. Institutions don't want an interface — they want certainty, visibility, and auditability.

This is also why HashKey Cloud needed to evolve from a pure Staking Service Provider into an institutional on-chain asset operations platform — once asset allocations come in, they need to generate value continuously, safely, and transparently within balance sheets or fund structures.

This aligns with HashKey's own experience. HashKey was among Ethereum's earliest institutional investors, maintaining a steadfast long-term Hodl position, and many of the clients we serve are likewise long-termists. This is why we've spent years refining our "asset operations" capabilities: from 2019 to the present, HashKey Cloud has cumulatively generated over $3.2 billion in returns for clients, currently creating annualized returns equivalent to more than 80,000 ETH per year for clients (note: not all native ETH yields, denominated in ETH for calculation), while maintaining fee rates among the most attractive in the compliant staking sector.

What institutions truly need is an on-chain asset operations infrastructure that can run long-term, continuously generate value, and simultaneously satisfy compliance, security, and audit requirements.

Moderator: Wendy, as a custodian, you must have deeper insights into this wave of "institution-driven rallies." Previously, when people mentioned institutional clients, they'd think of funds, miners, or exchanges. But now, the clients themselves seem increasingly diverse.

Wendy: Exactly. Internally, we look at clients from two dimensions: which segment the client belongs to, and what purpose the capital within the same client serves. The changes in client segments have been quite pronounced over recent years.

Mining clients: The coins mined must be split between operational electricity costs and long-term "reserve" — only the latter has room for staking. Our custody system natively supports multiple Workspaces, allowing different teams to manage assets for different purposes with distinct permission controls.

DAT-type clients: These exist specifically for long-term holding and asset appreciation, demanding the highest levels of transparency and external audits, and are the most proactive in exploring on-chain yields. More traditional listed companies are moving into DAT, increasingly relying on trusted third parties.

Payment clients: These have high capital flow volumes with asset structures dominated by stablecoins, caring more about system efficiency and stability, with less emphasis on yield pursuit — typically only discussing solutions once their business reaches a certain scale.

So our logic has always been very simple:

First determine who the client is, then determine what the money is, and only then match products accordingly.

We don't push a yield product just because we see one — we design solutions based on the client's actual capital purpose and risk appetite.

III. Making "Trust" a Deliverable Product

Moderator: So from the client demand perspective, "yield" is really just one component of the entire institutional service system.

Beyond staking, are there other typical scenarios that reflect this "matching solutions to client needs" approach?

Wendy: Yes, and I think an important premise needs to be emphasized here: the primary need of pure custody clients when they come to us has never been yield. If they were truly only chasing returns, the market offers plenty of options. Zooming into the details of client profiles — this is the "feel" we've accumulated over the years: clients seeking custody first want compliance, fund security, and auditability; only on that foundation do they further consider whether asset appreciation can be combined with their business scenarios.

Payment clients are the best example: they're holding increasingly large stablecoin positions while needing to maintain high liquidity. In March 2026, the global stablecoin market cap stood at approximately $317 billion, with on-chain settlement volume reaching about $7.5 trillion — surpassing the US ACH network's $6.8 trillion for the first time. Stablecoins are evolving from trading instruments into payment and settlement infrastructure.

Cactus has partnered with Circle to enable stablecoin "yield generation" on custody addresses: funds aren't locked — they accrue interest upon deposit and pause upon withdrawal, with Circle distributing Treasury yields to clients. The yield rate is lower than exchange wealth management products, but clients are more satisfied with this "restrained yield." For those managing large-scale assets, preserving liquidity and staying within a familiar custody framework matters more than earning slightly more.

When we select partners, we evaluate yields, but also whether their risk profiles, compliance standards, and understanding of long-term client relationships align with ours.

IV. The Logic Behind the Partnership: Unchanged Security Architecture, Clear Responsibility Boundaries

Moderator: This brings us back to today's "Yield on Trust" theme. Institutions aren't short on staking products, and the market isn't short on custodians. What's truly difficult is combining the two without sacrificing security, compliance, and auditability. How exactly is this partnership being implemented on the ground? How does 1+1 achieve more than 2?

Shen Jun: The core of this partnership isn't about putting two products together — it's about defining the security architecture and responsibility boundaries clearly from the outset.

Cactus has a mature custody system, approval processes, and permission architecture. What we're doing is adding on-chain yield capabilities on top of this system, rather than forcing clients to rebuild a separate process for staking — assets remain within Cactus's custody framework at all times, and adding staking simply introduces additional operations and authorizations to existing workflows, without requiring the security boundaries to be redefined. HashKey Cloud handles what we do best: node infrastructure, on-chain operations, and staking services.

Delegating specialized work to specialized experts is actually safer and more efficient than having one institution try to do everything.

More importantly, the chain of responsibility must be crystal clear. HashKey Cloud has maintained a 0 Slash record since beginning node operations at the end of 2018, and offers up to 100% Slashing Coverage insurance protection, with core metrics including 99.9% Validator Uptime. What institutions truly need isn't an extra 0.1% or 0.2% in returns — it's a complete, transparent, and accountable asset operations chain. That's what real "1+1>2" means.

Wendy: I think this reflects a very important shift in Web3:

Specialized division of labor has become irreversible.

In early Web3, many things were done in-house — managing your own wallets, running your own nodes, building your own trading systems. But today, a mature institution doesn't need to become an expert in every domain.

Especially for clients transitioning from traditional finance into digital assets, they may understand asset management deeply but not necessarily validator mechanics. A solo validator requires 32 ETH, plus node deployment, operations, monitoring, upgrades, and Slash risk management — building the entire infrastructure in-house isn't an economical investment.

So the more rational model going forward is:

Custodians handle asset security and permission management, while specialized infrastructure providers handle node and on-chain operations.

This way, clients can dedicate their most important attention to their core business instead of exhausting energy on infrastructure maintenance.

V. On "Zero Commission"

Moderator: We've talked a lot about long-termism, but let's touch on what everyone cares about most (laughs). I heard that Cactus clients onboarding with HashKey Cloud are getting a particularly generous promotion?

Shen Jun: That's right. In the initial phase of this partnership, we've specifically set up a 0 Commission Fee window period. Clients participating during the campaign window can enjoy a phased zero-fee promotion. Our reasoning is simple: both parties want clients to experience the complete custody + staking service at the lowest possible cost.

Wendy: HashKey Cloud's sincerity here is indeed substantial. We also hope that in the first few months of the partnership, clients can genuinely experience the entire process rather than starting from price considerations.

Moderator: What's particularly interesting here is that both parties are giving up margins.

It's standard industry practice for custodians and staking service providers to charge Commission, but this time, HashKey Cloud proactively proposed a 0 Commission structure, and Cactus is waiving corresponding fees in tandem. So for clients, it's as if both parties are jointly lowering the barrier for the first experience. The initial phase supports ETH Staking, with Solana, BNB, and more assets to be rolled out subsequently.

VI. Under AI's "Mega Narrative," Are BTC and ETH Still Worth Long-Term Allocation?

Over the past few years, Crypto once possessed a very strong independent narrative. But today, AI has virtually monopolized the loudest narrative in global capital markets.

In another discussion at Bitcoin Asia, a guest raised a very thought-provoking point:

The entire Crypto Market seems to be evolving from an asset market with independent pricing power into something increasingly resembling a "distribution channel" for US equities. If even the industry itself is re-examining its independent value, can BTC and ETH still serve as part of institutions' long-term allocations?

Moderator: The Cactus × HashKey Cloud partnership initially supports ETH Staking, and the ETH staking rate keeps hitting new highs. There's a market debate: does Ethereum's value derive from "ETH as an asset" or from "Ethereum as global settlement and computing infrastructure"? Which way do the two of you lean? And where do BTC and ETH's roles in institutional asset allocation head in the future?

Wendy: Clients holding substantial BTC and ETH positions long-term won't easily change their convictions due to short-term volatility. BTC's scarcity, store-of-value properties, and macro-hedging value as a non-sovereign asset are gradually entering more institutions' allocation frameworks — during the recent major market correction, US spot Bitcoin ETF holdings didn't decline proportionally with price, indicating that institutions hold BTC with longer time horizons after allocation, making BTC increasingly resemble a "ballast" in asset portfolios. ETH's case is more complex because it's simultaneously an asset and represents the Ethereum network itself.

During bear markets, declining on-chain activity prompts renewed debate about its value, but even in quieter periods, stablecoin activity, asset issuance, and on-chain settlement on Ethereum continue unabated. In February, Ethereum's staked amount surpassed 30% of total supply (approximately 36.3 million ETH); by August, it had climbed further to around 35%. ETH Treasury companies like Bitmine are also continuously expanding their staking scale, having disclosed over 4.9 million ETH as of July.

The industry's fundamental base remains unchanged, and Ethereum's position should remain relatively steadfast. So I'm not inclined to simply categorize ETH as "an asset" or "infrastructure." It may precisely be a combination of both. Ethereum's value derives not only from people holding ETH itself, but also from whether the network continues generating real economic activity.

Shen Jun: I fully agree. And I think for institutions, BTC and ETH will increasingly assume distinctly different roles going forward. BTC is more like a long-term asset allocation and store-of-value instrument. ETH, beyond being an asset in itself, increasingly resembles infrastructure capable of hosting financial activity.

This is also why we're seeing a very interesting shift recently:

Previously, people held BTC and basically just "sat on it." Now, people are exploring whether these long-dormant assets can participate in new on-chain economic activity without altering BTC's core security properties. This is why BTC ecosystem projects like Babylon and Stacks are gaining attention: can BTC maintain its original asset security and control while gaining more "productivity"? We're collaborating with ecosystem partners like Babylon and Stacks, hoping to develop BTC yield products that are as secure and trustworthy as those on ETH.

So I believe that after institutions allocate digital assets