Wintermute Ventures: By 2026, Crypto to Become Internet Economy's Settlement Layer

Author: Wintermute Ventures

Compiled by DeepTide TechFlow

Deep Tides Guide:For decades, the internet has enabled information to flow freely across national borders, platforms, and systems. But value has lagged. Money, assets, and financial agreements still flow through a fragmented infrastructure built on traditional rails, national borders, and intermediaries that extract rent at each node. Wintermute Ventures believes this gap is closing at an unprecedented speed, and crypto is becoming the clearing and settlement layer the internet economy has always needed.

The report focuses on five major themes: Everything is Tradable (prediction markets, tokenization), stablecoin interoperability, token economics returning to fundamentals, DeFi and TradFi convergence, and privacy becoming a regulatory driver. Infrastructure maturation is the common thread behind this transition.

The full text is as follows:

For decades, the internet has enabled information to flow freely across borders, platforms, and systems. But value has lagged. Money, assets, and financial agreements still flow through a fragmented infrastructure built on traditional rails, national borders, and intermediaries that extract rent at every node.

This gap is closing at an unprecedented speed. This creates opportunities for infrastructure companies to directly replace traditional clearing, settlement, and custody functions. Infrastructure that enables value to flow as freely as information is no longer theoretical. It is being built, deployed, and used at scale.

For years, crypto has existed on the blockchain, but has been disconnected from the real economy. This is changing. Crypto is becoming the settlement and clearing layer the internet economy has always needed; a layer that operates continuously, transparently, and without requiring permission from centralized gatekeepers.

The following topics represent where we believe digital assets are headed in 2026, and are also areas where Wintermute Ventures is actively supporting founders.

More and more assets and real-world outcomes are becoming tradable through new financial primitives, including prediction markets, tokenization, and derivatives. This transformation provides a liquidity layer to areas historically without markets.

Tokenization and synthetic assets bring liquidity to known assets. Prediction markets go a step further, pricing things that were previously unpriced, transforming raw information into tradable instruments.

Prediction markets continue to expand, both as consumer products and as new financial instruments, enabling hedging, outcome-linked trading, and views on fine-grained events. They are also beginning to replace parts of traditional financial infrastructure.

Insurance is a compelling example: outcome-based markets can offer cheaper and more flexible hedging than traditional insurance or reinsurance by directly pricing specific risks rather than bundling them into broad products. Users can hedge specific wind speeds at a specific location over a specific time period, rather than buying hurricane insurance covering a region. Over a longer time span, these specialized risks can be handpicked and bundled into individual unique needs by agent workflows.

As prediction market infrastructure scales, entirely new categories of data products have emerged around topics that were previously never priced. We anticipate the emergence of markets designed to trade and quantify objective perception, emotion, and collective opinion. These emerging markets are a natural extension of decentralized finance, unlocking new ways to price and exchange information itself. When everything becomes tradable, the infrastructure that provides liquidity, enables price discovery, and ensures settlement becomes critical.

This structural shift will concentrate value in the infrastructure layer, directly affecting how we allocate capital. We actively support teams building core market and settlement infrastructure, data layers for verification and attestation, and new data products that enable the financialization of previously non-tradable outcomes. We also focus on novel abstraction models that make these markets programmable and composable, enabling them to be embedded into real-world workflows and replacing parts of traditional financial and insurance infrastructure.

Digital assets lack equivalents of strong settlement banks and clearing houses, which are the grease for the wheels of traditional finance. Stablecoins enable open access and programmable value, but without settlement infrastructure, fragmentation can create friction that limits adoption.

As stablecoin issuers proliferate across different ecosystems with varying collateral models, the demand for an interoperability layer capable of reliably composing these assets is growing. To scale this system, crypto needs infrastructure that can net settle, convert, and settle across stablecoins and chains without introducing additional credit risk, liquidity risk, or operational overhead.

The missing abstraction is shifting the conversion and credit risk to the stablecoin issuer through balance sheet-based interoperability, rather than forcing end users to manage foreign exchange, routing, or counterparty risk when transacting across stablecoins. We see this as the on-chain equivalent of correspondent banking, with settlement in seconds, open access to application builders, and expect to see more companies positioning themselves as coordination layers between issuers and applications.

Token-driven growth without a sustainable business model is losing its effectiveness. Companies that rely on subsidizing users or liquidity providers while operating fragile revenue models will find it harder to compete.

Valuation will anchor more closely to sustainable earnings and forward-looking projections, converging toward a cash flow-based framework. Annualizing short-term, volatile monthly expense peaks is no longer a credible way to price businesses, as earnings quality and incentive alignment become central to valuation. Tokens without a credible value capture path will struggle to maintain demand beyond the speculative phase.

Therefore, fewer companies will issue tokens at their inception. Many will default to equity-first structures, primarily using blockchain as a backend infrastructure invisible to users and investors. When tokens are used, issuance will increasingly occur only after product-market fit, revenue, unit economics, and distribution have been proven, and stakeholder incentives are aligned.

We believe this transition is a necessary and beneficial evolution for the health of the entire ecosystem. Founders can focus on building sustainable businesses rather than prioritizing token incentives and demand too early. Investors can evaluate companies using familiar financial frameworks. Users get products designed for long-term value.

The future of finance is not DeFi or TradFi: it is the convergence of both. A dual-track architecture allows fintech applications to dynamically route transactions based on cost, speed, and yield. Breakthrough consumer applications will look like traditional fintech products, with wallets, bridges, and chains completely abstracted away. Capital efficiency, yield, settlement speed, and transparent execution define the next generation of financial products.

Although user experience integrates with fintech, the industry continues to expand rapidly behind the scenes. Tokenization and highly composable financial primitives drive this growth, enabling deeper liquidity and more complex financial products.

Distribution will be more important than having an interface. Winning teams will build backend-first infrastructure that plugs into existing platforms and channels, rather than competing as standalone apps. Personalization and automation (increasingly enhanced by AI) will improve pricing, routing, and yield behind the scenes. Users won't consciously choose DeFi. They will choose better products.

Privacy is becoming a foundational element for institutional adoption, shifting from regulatory responsibility to a regulatory driver. Selective disclosure using zero-knowledge proofs and multi-party computation allows participants to prove compliance without exposing the original data.

In practice, this enables banks to assess creditworthiness without accessing transaction history, allows employers to verify employment without exposing salaries, and enables institutions to prove reserves without revealing positions. A concrete realization of this vision expands into a world where businesses no longer need to store massive amounts of data, thus freeing themselves from costly and burdensome data privacy regulations. New primitives such as private shared state, zkTLS, and MPC unlock under-collateralized loans, tiering, and new on-chain risk products, shifting entire categories of structured finance onto the blockchain, which was previously infeasible.

Regulatory clarity has shifted from adversarial obstacles to standardized distribution channels. Although the "permissionless" nature of early DeFi remains an important engine for innovation, the arrival of operational frameworks such as the U.S. GENIUS Act, Europe's MiCA, and Hong Kong's stablecoin regime has provided traditional institutions with greater clarity. By 2026, the story will no longer be about whether institutions can use blockchain, but about how they use these guidelines to replace traditional pipelines with high-speed on-chain tracks.

These standards will facilitate a new wave of compliant on-chain products, regulated on-ramps and off-ramps, and institutional-grade infrastructure, without enforcing full centralization, thereby increasing institutional participation.

Regions that combine clear regulations with fast approvals will increasingly attract capital, talent, and experimentation, accelerating the normalization of on-chain value distribution in native crypto and hybrid financial products, while slower regimes will fall behind.

Infrastructure maturation is the common thread of this transition. Cryptography is becoming the settlement and clearing layer of the internet economy, enabling value to flow freely like information. The protocols, primitives, and applications being built today are unlocking new forms of real economic activity and expanding the scope of what is possible on the internet.

At Wintermute Ventures, we support founders building this infrastructure. We look for teams that combine deep technical understanding with strong product thinking. Teams that launch solutions people truly want to use. Teams that can operate within regulatory frameworks while advancing the core principles of decentralized systems. Teams that design businesses built for long-term impact.

2026 will mark a turning point. Cryptographic infrastructure will increasingly fade into the background for users while becoming the foundation of the global financial system. The best infrastructure quietly empowers people without seeking attention.

If you are building in any of these areas, please contact our team.

You can also fill out the form on our website:

https://www.wintermute.com/contact/ventures