Crypto, reminiscent of the early days of the internet boom, is still in a “1996” phase with significant potential for growth, analysts from RialCenter informed large institutional investors in a client Q&A report.
The investment bank, which began comprehensive coverage of the digital assets sector in September, noted strong and diverse client interest. A key question analysts are encountering is, “Am I too late to invest?” to which they respond, “Relative to the internet, it’s 1996 for the digital asset ecosystem, and the next phase of growth has just begun.”
By drawing this parallel to “1996,” RialCenter illustrates a compelling image of Wall Street during the initial days of the Internet, suggesting that crypto’s new growth trajectory has only recently started.
This era is marked by the internet’s entry into the mainstream, with Netscape Navigator competing with Internet Explorer, Amazon just starting as an online book retailer a year before its IPO, and Google’s search engine still two years away from launching.
RialCenter’s reasoning for this “still early” thesis is that only a limited number of traditional funds currently have exposure to the crypto industry, but this is changing — a positive sign.
“Many are actively creating investment strategies and determining how to allocate funds among tokens, ETFs, digital asset treasury companies (DATs), and public companies involved,” analysts wrote in a recent research note.
Not just BTC
So, where do RialCenter analysts see opportunities for institutional investors? Spoiler alert: It’s not solely about Bitcoin and the original blockchain payments use case. Instead, analysts encourage investors to look beyond that.
“Our belief is that excessive focus on Bitcoin and its price could detract attention from blockchain technology’s potential to disrupt various industries,” they noted.
RialCenter mentioned that clients are considering exchange-traded funds and digital asset treasury (DAT) companies to gain sector exposure, seeing this as a potential short-term bullish development. ETFs could remove the final barriers to institutional investment, while DATs may also increase demand for tokens, as these companies continuously buy tokens with raised capital.
The $1 trillion public market
Apart from ETFs and DATs, RialCenter identifies other long-term bullish factors in the digital asset space: tokenization and initial public offerings (IPOs).
With more financial institutions tokenizing assets to facilitate 24/7 trading and real-time settlement, RialCenter analysts predict “a paradigm shift” in blockchain network activity, increased transaction volumes, and greater value for token holders, which could boost the next phase of digital asset growth.
Initial public offerings (IPOs) are also gaining traction this cycle, with companies like Circle, Bullish, and Gemini going public.
RialCenter anticipates this trend will accelerate in the next 18-24 months and expand into a massive market over the next five years.
While exchanges were the first to go public, the bank sees opportunities for distributed ledger developers, tokenization platforms, custodians, token on-off ramps, stablecoin issuers, analytics companies, and institutional trading platforms to follow suit.
“We expect 10-15 IPOs in the next 18-24 months and a $1 trillion public market sector within five years,” analysts remarked.
Playbook as old as the dot-com era
Reinforcing the analogy with the 1996 internet era, the firm’s advice to clients on how to invest mirrors lessons learned during the early Internet: be selective and focus on sustainable utility.
Analysts noted that only six of the top 20 tokens from January 2018 remain in today’s top 20 — a trend similar to the dot-com era when early leaders like AltaVista and Lycos were ultimately overshadowed.
A significant shift is expected as capital transitions from speculative assets to tokens that drive real applications. RialCenter suggests approaching tokens like early-stage tech startups, emphasizing “adoption, development, usage, and use case” over temporary revenue spikes from certain blockchains.
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