This article is part of a 5-part series covering key insights from the Digital Asset Summit 2025 in New York City. Each part dives deep into a different keynote session, providing a breakdown of the most critical points and takeaways.
TL;DR:
- Stagnant Growth: Crypto adoption hasn’t expanded beyond Bitcoin and Ethereum in the past 5 years.
- Institutional Liquidity: Institutions are profiting from infrastructure but not driving innovation.
- Liquidity Battle: Chains compete for the same liquidity without introducing new use cases.
- Waiting Game: Institutions seem to be speculating, waiting for wider adoption.
In this session, Meltem Demirors, founder of Crucible Capital, delivered a compelling keynote titled “Believe in Something.” She highlighted the troubling reality of stagnant crypto growth beyond Bitcoin and Ethereum and explored how institutions are capitalizing on liquidity while ignoring technological innovation.
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Institutions Holding Back Crypto Innovation
In her keynote session titled “Believe in Something,” Meltem Demirors, founder of Crucible, delivered a hard-hitting analysis of the current state of the crypto market. Her talk explored how institutional involvement, despite its promise, has led to stagnation in innovation and adoption beyond Bitcoin and Ethereum.
“Institutional finance is profiting from crypto infrastructure but is not driving real innovation,” Demirors stated, emphasizing how traditional finance players are treating crypto as a speculative asset rather than a technological revolution.
The LedgerNotes team—John O’Connell and Ari Eiberman—followed up with their own commentary on Demirors’ insights, offering an in-depth discussion on how institutional behavior is impacting crypto growth and liquidity distribution.
Crypto Adoption Beyond Bitcoin and Ethereum Is Stagnant
Demirors presented a striking chart that highlights a major pain point for the crypto space:
CHART
Despite billions of dollars poured into Layer 1 and Layer 2 protocols, cross-chain bridges, and app chains, growth in market cap and trading volume has been negligible. Institutional interest has focused on speculative financial instruments rather than supporting real-world use cases or advancing decentralized applications.
The LedgerNotes team echoed these concerns. During their commentary, John O’Connell pointed out that “We’re seeing liquidity shift from one chain to another, but the total amount of liquidity in the system isn’t increasing.” This liquidity stagnation means that while new platforms emerge, they’re not expanding the overall market. Instead, they’re cannibalizing existing capital, creating a zero-sum game across chains.
Institutions Are Extracting Liquidity, Not Building Innovation
Demirors highlighted the mercenary mindset of institutional players who engage in crypto purely to extract liquidity without fostering technological growth:
She explained that while these financial instruments create capital flows, they’re not contributing to the decentralized vision that Bitcoin and Ethereum originally championed.
LedgerNotes Commentary:
In their follow-up, Ariel Eiberman reflected on this, comparing institutional behavior to a Forex exchange model: “Institutions aren’t looking for the next disruptive app—they’re treating crypto like a currency to trade, not a technology to build on.”
This approach limits the innovation potential, as institutions focus on short-term gains rather than funding projects that could unlock new use cases or expand adoption.
Chains Are Fighting Over the Same Capital
One of Demirors’ most eye-opening insights was the observation that liquidity is merely circulating between chains without contributing to ecosystem growth. Layer 1s, Layer 2s, and even Layer 3s are fighting over the same pool of capital, which is easily transferable across ecosystems. However, since these assets are not introducing new demand or expanding the user base, they perpetuate a cycle of stagnant liquidity.
John O’Connell elaborated on this during LedgerNotes’ analysis. “It’s not about competing for liquidity. It’s about creating demand by developing applications that solve real problems”. Until this happens, liquidity will continue to circulate without generating meaningful value.
The Bigger Picture: Energy, Compute & Crypto as the Next Catalyst
While Demirors highlighted the current stagnation, she also pointed to energy and computing infrastructure as the next major catalyst for growth in the crypto industry. “The future is about a lot more energy, a lot more compute, and a lot more cryptocurrency. We need new capital markets and new forms of financial engineering to make that possible”.
Demirors argued that proof of work (PoW) laid the foundation for the crypto economy by creating thermoeconomic value through energy consumption. Moving forward, she sees an intersection between crypto, energy, and infrastructure as the industry’s North Star. “AI wouldn’t have been possible without Bitcoin’s capitalization of data centers and hardware innovation,” she added, underscoring how crypto innovations have catalyzed growth in adjacent industries.
Why This Matters for Crypto Professionals
For finance professionals and crypto accountants navigating this rapidly evolving space, understanding institutional behavior and its impact on crypto liquidity is essential. Recognizing the next wave of growth driven by energy and computing infrastructure can help industry leaders position themselves ahead of the curve.
👉 Watch Now: Catch up on Meltem Demirors’ keynote and the LedgerNotes analysis for key insights on institutional impact in crypto. Explore More: Don’t miss other recaps from the Digital Asset Summit 2025 NYC Series and stay tuned for upcoming highlights from the latest web3 conference like DC Blockchain Summit and Token2049.
About Meltem Demirors
Meltem Demirors is a renowned thought leader in crypto finance and the founder of Crucible Capital, a platform focused on driving crypto adoption and building decentralized financial systems. She has been a vocal advocate for transparency and accountability in the crypto space, often highlighting the nuances between institutional involvement and grassroots innovation.
At Digital Asset Summit 2025, she delivered a powerful session titled “Believe in Something,” where she explored how institutional participation is stalling crypto growth and what’s needed to reignite innovation.
FAQs
Despite technological improvements, most new protocols haven’t attracted sustained user adoption. Liquidity shifts between platforms without expanding the overall ecosystem.
Institutions focus on speculation rather than contributing to innovation, extracting liquidity without driving long-term technological growth.
The crypto ecosystem needs to focus on real-world applications that drive durable demand and unlock new sources of liquidity beyond speculative trading.
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