Crypto IPO market stalls as capital rotates to AI and macro uncertainty weighs

A $60B Vote of Confidence

The crypto IPO market has been a significant source of funding for digital asset companies, but recent trends suggest that investors are rotating their capital into other sectors. According to Christian Lopez, head of blockchain and digital assets at investment bank Cohen & Company Capital Markets, the market has slowed sharply due to weak market conditions and growing macroeconomic uncertainty.

Lopez points to last October's liquidity event as a turning point that drained capital from the digital asset ecosystem. Retail investors who once fueled crypto markets have largely shifted their attention to artificial intelligence, he says, before expanding into other areas of the technology sector, including the so-called Mag 7 stocks. More recently, however, even AI-related equities have experienced sharp pullbacks, suggesting capital is rotating once again.

Why Cursor?

Macro headwinds are weighing on sentiment, Lopez says. Uncertainty over interest rates has made investors particularly cautious toward high-beta assets such as crypto. While signals from the Federal Reserve and the Trump administration point toward a more deflationary environment that could eventually support rate cuts, global markets continue to face pressure from central bank actions and deleveraging, including recent moves by the Bank of Japan to defend the yen.

The Road Ahead

Despite these headwinds, Lopez says regulatory clarity is no longer the primary obstacle for companies considering public listings. "That's less relevant than before," he said. "Companies went public before there was regulatory clarity." Kraken's reported plans to pursue a public listing illustrate how crypto firms are adapting, Lopez says. The exchange has sought to diversify beyond crypto trading, a strategy he believes better positions companies for public markets.

Institutional adoption of blockchain technology continues to gain traction across traditional finance, Lopez says. Major financial institutions, including Morgan Stanley, Nasdaq, and the New York Stock Exchange, are building blockchain-based infrastructure and preparing for tokenized settlement. The industry is moving toward near-instant settlement, shifting from T+1 to T+0, while initiatives such as the OpenUSD network are bringing together more than 140 financial institutions and payments companies around stablecoin infrastructure.

Lopez expects the long-term winners to be blockchain infrastructure providers rather than businesses built solely around individual cryptocurrencies. "A lot of crypto companies trying to raise capital in the private markets are finding it difficult because of their singular focus on one product offering," he says. While Lopez expects bitcoin, ether, and solana, along with a handful of other major tokens, to remain important assets, he predicts that thousands of smaller cryptocurrencies are unlikely to survive.

The crypto IPO market may not meaningfully reopen for listings until next year, citing expectations that bitcoin's market cycle could bottom around October, noting that the broader crypto market has tended to follow the world's largest cryptocurrency's performance.