Binance Research: The Fifth Crypto Cycle Driven by RWA
Binance's research team stated at a closed-door event that major bull markets in crypto often require both monetary easing and paradigm innovation to occur simultaneously, with new use cases determining how far a growth cycle can spread. They divided the development of the crypto market to date into five major cycles, believing that the tokenization of real-world assets (RWA) will be the core driving force of the fifth cycle.
The first cycle was the "store of value" phase from 2011 to 2015, represented by Bitcoin and Litecoin, with the competitive focus on "digital gold" and peer-to-peer currency. The second cycle was the "public chain infrastructure" phase from 2016 to 2018, where projects like Ethereum and EOS explored the "world computer," with infrastructure leading but applications still immature. During the ICO boom of this period, the EOS project alone raised about $4 billion.
The third cycle was the "DeFi" phase from 2019 to 2022, transitioning from decentralized trading and lending to algorithmic liquidity experiments. Some projects lacked real cash flow and collapsed after the Federal Reserve raised interest rates. The fourth cycle is the "institutional entry" phase from 2023 to 2025: Bitcoin spot ETFs opened the door for traditional funds, with the market rotating between themes like Meme, BTCFi, and AI, but new application paradigms remain limited.
The fifth cycle, starting in 2026, is referred to by Binance's research team as "RWA/DeFi 3.0." The on-chain RWA has nearly reached $40 billion, growing about 50% to 60% within the year. According to a specialized report from Binance's research team, as of September 15, 2026, the scale of tokenized RWA assets is $34.18 billion, with an increase of 85.2% year-to-date.
By category, bonds and money market funds are the largest category, with a scale of $18.29 billion; tokenized stocks are at $4.43 billion, growing 390.4% within the year, making it the fastest-growing category. Additionally, there are private credit, gold, commodities, and real estate. The penetration rate remains extremely low: tokenized assets overall account for about 0.01% of the corresponding traditional market; stocks account for only 0.0029% of the $151.9 trillion global public stock market, and bonds and money funds about 0.0171%.
The Binance research team also proposed a new metric called "capital activation rate," measuring the proportion of tokenized assets truly utilized in on-chain finance, currently around 12%. Private credit is the highest at 49.67%; tokenized stocks rose from 1.95% at the beginning of the year to 7.54%. Among tokenized stocks invested in DeFi, 65.4% entered liquidity pools, and 28.1% was used for lending, together accounting for 93.5%. The report estimates that by 2030, the scale of tokenized stocks could reach about $61 billion in a conservative scenario, and up to $987 billion in an optimistic scenario.
In terms of market mechanisms, this is a macro-driven judgment. Buyers are mainly institutions and crypto-native funds seeking stable on-chain returns; they use stablecoins to purchase tokenized government bonds, money market funds, and private credit, converting idle on-chain dollars into assets with real interest. Issuers and custodians are on the sell side, including traditional asset management institutions and tokenization platforms. Funds are flowing from high-volatility meme coins and purely narrative tokens to assets that can provide verifiable cash flow. Beneficiaries include RWA issuance platforms, public chains that carry assets, stablecoin issuers, and lending protocols that can access RWA collateral; those under pressure are DeFi projects that lack real returns and rely on token inflation to maintain yields.
Source: Public Information
ABAB AI Insight
Historically, major movements in the crypto market have indeed been accompanied by a resonance of macro liquidity and new application scenarios. Bitcoin has halved four times in 2012, 2016, 2020, and 2024, with the March 2020 halving coinciding with the Federal Reserve lowering rates to zero and initiating unlimited quantitative easing, directly giving rise to the "DeFi Summer" and the bull market of 2021. In 2022, the Federal Reserve rapidly raised rates from zero to 5.25% to 5.5% by July 2023, leading to the collapse of Terra/Luna in May 2022, which evaporated about $40 billion in market value, followed by the bankruptcies of Celsius and FTX, proving that algorithmic yield models lacking real cash flow cannot withstand rate hikes. In January 2024, the U.S. SEC approved Bitcoin spot ETFs, and in September of the same year, the Federal Reserve began a rate-cutting cycle, reducing rates continuously to 3.5% to 3.75% by September to December 2025, providing macro conditions for institutional funds to re-enter the crypto market.
From a capital pathway perspective, traditional asset management giants are already laying pipelines for the RWA cycle. Franklin Templeton launched the on-chain money market fund BENJI in 2021; BlackRock partnered with Securitize in March 2024 to launch the tokenized money market fund BUIDL, which quickly surpassed $2 billion in scale and was accepted by multiple exchanges and DeFi protocols as collateral. Binance is also on the same path: in 2025, it began accepting BUIDL as collateral for institutional clients' trading, and in 2026 launched U.S. stock trading and tokenized stocks bStocks. The Binance research team defines the fifth cycle as RWA, which aligns closely with Binance's own business layout, and this judgment also carries a clear commercial stance.
In terms of historical analogy, the most direct case is MakerDAO. From 2022 to 2023, MakerDAO allocated billions of dollars in reserves to U.S. government bonds and other real-world assets, with RWA income once accounting for a large portion of its protocol income, proving that on-chain protocols can maintain cash flow through traditional interest. An earlier analogy is the asset securitization of the 1970s and 1980s: in 1977, American banks issued the first private mortgage-backed securities, and Solomon Brothers' Lewis Ranieri drove the explosion of the MBS market, turning illiquid loans into tradable securities and fundamentally changing the U.S. credit market. RWA is essentially the blockchain version of securitization, and the industry is currently at a starting phase with a penetration rate of about 0.01%, with the most mature being government bonds and money market funds, while stocks and private credit are accelerating.
Essentially, this is a transfer of pricing power. In the first three cycles, DeFi's yields were priced by the protocols themselves: liquidity mining rewards, token inflation, and leverage demand determined on-chain interest rates, which were almost decoupled from the real economy, so once the Federal Reserve raised rates and the real risk-free rate exceeded on-chain yields, funds would withdraw en masse. RWA brings U.S. government bond rates, corporate credit spreads, and stock dividends on-chain, and the benchmark yield for DeFi begins to be determined by the Federal Reserve and traditional credit markets. The mechanism for this transfer occurs as the scale of stablecoins continues to expand, with a large amount of dollars needing to earn interest on-chain, while tokenized government bonds provide the only compliant, verifiable "on-chain risk-free rate." Once pricing power returns to the traditional financial system, the crypto market cycles will increasingly closely follow global interest rate cycles, rather than being driven solely by halvings and narratives.
ABAB News · Cognitive Law
- Bull markets require two things: cheap money and new uses.
- Yields without cash flow are merely delayed inflation.
- On-chain interest rates will ultimately align with real-world risk-free rates.