Blockworks Co-founder Says Crypto Shows Two Major Divergences: Strong Institutional Activity but Weak Token Market
Jason Yanowitz, co-founder of Blockworks, stated that the crypto industry is experiencing two major divergences: institutional crypto business has never been stronger, while Jamie Dimon once called crypto a scam, JP Morgan is now actively promoting tokenization and custodial services for crypto assets.
In contrast, the token market and venture capital sector, which were once extremely hot in the early pre-seed and seed stages, are now forming a K-shaped recovery, with most companies falling into the "have-nots" category.
Institutional capital is flowing massively into compliant tokenization and custodial services, shifting funds from retail token speculation to Wall Street institutional products. Traditional financial institutions like JP Morgan and compliant projects are benefiting, while most early token projects and small to medium-sized VCs face dual pressures of financing and liquidity.
Source: Public Information
ABAB AI Insight
Jason Yanowitz, as co-founder of Blockworks, has long observed the cycles of the crypto market and has previously pointed out the industry's shift from an "anti-bank" ideology to collaboration with traditional finance. This K-shaped divergence continues his assessment of accelerated institutional adoption while the retail/token side remains weak.
In terms of capital pathways, JP Morgan and others are expanding tokenization, stablecoins, and custodial services through the Kinexys platform and JPM Coin, directing institutional funds and corporate assets into blockchain infrastructure. Meanwhile, VC resources are concentrating on projects with real revenue, business development capabilities, and compliance pathways, creating a capital stratification of "institutional compliance vs pure token speculation."
Similar to the divergence between the DeFi summer of 2021 and the bear market of 2022-2023, the crypto industry is in a transitional phase from "mass token frenzy" to "institutional infrastructure dominance." Traditional giants like JP Morgan have shifted from opponents to active participants.
Essentially, this represents capital concentration: traditional decentralized tokens and early VC inclusive financing models are being replaced by institutional-grade compliant segments. Yanowitz's observation of the K-shaped recovery indicates that capital is highly concentrated in a few projects with Wall Street distribution capabilities, real business, and compliance execution, reconstructing the crypto industry's value creation mechanism from "retail-driven speculation" to "institution-driven infrastructure."