RWA Takes the Baton from ETF? Wintermute Bets on the Next Bull Market's Liquidity Channel

Original Author: Jasper De Maere

Original Compilation: TechFlow (Deep Tide)

TechFlow Introduction: Standing at the threshold of a possible new bull market, Wintermute believes what's truly lacking isn't money, but new channels to draw money into crypto assets. Stablecoins, ETFs, and DATs have all weathered cycles and have now become everyday conduits; on-chain tokenization (RWA) has attracted approximately $16 billion over the past 12 months—still small in scale, but if regulation and collateral infrastructure open up, it could channel funds meant for "buying Apple/Treasuries" into the same wallets and stablecoin settlement systems, making it far easier for capital to flow into BTC and altcoins.

As we confront a potentially incoming new bull market, the question is: this time, which channel will deliver the pent-up liquidity? We believe RWA is the top candidate.

Bull markets are shaped by liquidity, and liquidity needs an entry point. The crypto market has never automatically plugged into global liquidity cycles just because "money exists"—it only truly participates when a sufficiently exciting new channel emerges to pull money into this asset class.

In the past, channels such as stablecoins, ETFs, and DATs (digital asset treasuries / corporate treasury coin accumulation) emerged one after another, bringing one-directional capital inflows, driving market repricing, and eventually normalizing into everyday conduits—where money flows in and out with equal ease.

Today, the most recent channels—ETFs and DATs—have fully normalized. The market is waiting for the next thing to drive the next bull market.

In every bull market, different channels grow, peak, and then normalize during the cycle reset:

- VC and ICO (2017/18): Fund capital and token sales, carrying the first wave of institutional-grade inflows.

- Stablecoins (2020/21): Net issuance exceeding $120 billion in a single year, building the on-chain dollar base that funded DeFi and the altcoin cycle.

- ETFs and DATs (2024/25): ETF net inflows of $63 billion, treasury coin accumulation exceeding $115 billion, primarily repricing major coins, with other assets barely benefiting.

In Chart 1, the dotted line represents the fifth channel currently taking shape. RWA net growth is still small relative to previous channel peaks, but it is the only line still trending upward while other channels decline. Below, we explain why we believe it can become the next channel of significance.

In every bear market, channel inflows dry up. Chart 2 shows that each cycle is essentially carried by one channel, with total inflow peaks reaching approximately 12% (2021) and 10% (2025) of market cap respectively.

Once that channel normalizes, inflows collapse toward zero. At the recent trough, total inflows were only about 2.4% of market cap: ETFs turned to net outflows, a large number of DATs traded at or below net asset value, the appeal of financial leverage was stripped away, and stablecoin supply saw its steepest contraction since the Terra collapse. Over the past two weeks, these flows have rebounded off the bottom, but remain only a fraction of prior cycle levels.

This kind of collapse is normal. In past resets, the next channel often began ramping up while the old channel was receding. This time, the channel taking shape is still an order of magnitude smaller and cannot carry the full load. Whether it can grow will determine the quality of this cycle.

RWA is typically described as "bringing assets on-chain." We believe it is equally about "bringing liquidity in." On-chain tokenized value has roughly tripled within about a year, reaching the $30 billion-plus range, and has continued to grow during the same months that the stablecoin base was contracting. The barrier between tokenized assets and crypto-native assets is thinning as capital flows more freely between the two.

Today, tokenized stocks, tokenized funds, and crypto assets increasingly sit in the same wallets and settle with the same stablecoins (stablecoins are the exchange mechanism). This fungibility transforms tokenization from "asset migration" into a "liquidity channel," which we believe could become the conduit for the next cycle.

The difference from previous cycles lies in how money enters. Earlier channels sent buyers directly to specific assets: VC/ICO bought new tokens, stablecoins bought DeFi and altcoin ecosystems, ETFs/DATs bought majors and blue-chip altcoins.

Tokenization is different. The money buys Apple, or a Treasury fund—not crypto assets. But the money is already sitting on-chain, making it far easier to move capital into BTC or altcoins.

Previous channels pushed capital into specific assets; tokenization places fresh capital inside the system first, where it can later be allocated more freely. The short-term impact will be quieter than the inflow on an ETF listing day. But over time, these balance sheets will be deployed across the ecosystem, and as connective infrastructure matures, friction will continue to decrease.

Over the past 12 months, RWA has attracted approximately $16 billion, roughly one-tenth of the combined best 12-month inflows of ETFs and DATs in the previous cycle. This channel is still in its ramp-up phase.

Chart 3 shows that, counting from when each channel first reached measurable scale, peak inflows typically occur 20 to 60 months after launch: ETFs peaked at about 20 months, stablecoins at about 33 months, VC and ICO at about 54 months. By this yardstick, the RWA channel is about 18 months old, with trailing 12-month inflows at approximately 0.9% of market cap—faster than DATs at the same age, slightly slower than ETFs. This is early, not a failure.

To date, most tokenized assets remain cash management products, Treasuries, and money market funds, sitting inside permissioned wrappers. The infrastructure to connect them to the rest of the system has only recently begun to open up.

The catalysts are both regulatory and mechanical:

- Regulation: Market structure legislation and tokenization frameworks are expanding who can hold tokenized securities and how they can be transferred, pushing them out of closed permissioned pools.

- Mechanics: Tokenized Treasuries and funds are being accepted as collateral by major venues and DeFi, transforming them from "idle cash on the books" into deployable working balances.

In 2024/25, liquidity came in through wrappers—ETFs and DATs holding majors and blue-chip altcoins. BTC, ETH, and a handful of altcoins were repriced. Beyond a few narratives, most of the rest of the system didn't receive this money.

Tokenization changes the entry point, not the destination. Money first buys the wrapper, then sits on-chain, and can be reallocated as friction decreases. The two questions that truly matter going forward are:

- Once RWA capital is on-chain, will it flow anywhere beyond the wrapper?

- If it moves, where does the value land? Which assets benefit, and which settlement rails, collateral infrastructure, and DeFi primitives capture the activity?

It's important to understand that tokenized assets are held more by balance sheets than by traders. This makes liquidity and any cycle effects more likely to accumulate slowly rather than arrive as a sudden shock. The rhythm is more like the stablecoin channel than an ETF listing day.

Over the past two weeks, inflows into existing channels have picked up, including ETF flows and stablecoin minting. This can support a rally, but a full cycle typically needs a new channel to carry the load. RWA is currently the only candidate still expanding.

We are closely watching whether tokenized balance sheets begin to leave these wrappers, appear more as collateral, and continue into DeFi—thereby generating measurable flows in secondary markets and lending activity. That would be the signal that the channel has gone from "potential" to "operational."