Bitcoin’s Second Wave: Institutional Capital Is Expanding Beyond ETFs

The Early Shift

What comes after institutions begin buying Bitcoin through regulated investment products? Coinbase Institutional Co-CEO Brett Tejpaul says a second wave of institutional capital is arriving, with adoption expanding beyond simply holding Bitcoin.

The first major phase focused on making crypto accessible to traditional investors. Spot Bitcoin ETFs gave institutions and everyday investors a familiar way to gain exposure without directly managing Bitcoin. Now, the next phase is increasingly about the financial infrastructure behind digital assets.

Banks Enter

On October 26, 2026, Tejpaul highlighted that seven of the world's largest banks are using Coinbase infrastructure. This points to a growing connection between traditional finance and blockchain-based services.

The important development is not just that banks are exploring crypto. It is that financial institutions are beginning to integrate blockchain technology into the way money moves and settles.

Payments Advance

Stablecoins are becoming a major part of this shift. These digital tokens are designed to maintain a stable value, often by tracking a currency such as the US dollar.

For example, a business could convert dollars into a dollar-backed stablecoin, transfer it across a blockchain within seconds, and settle funds with another business. This could make certain payments faster and more flexible than traditional systems.

Tejpaul highlighted stablecoin settlement activity reaching approximately $400 million per hour. Although that is substantial activity, it remains small compared with the overall global payments market. The potential opportunity is therefore much larger than the activity seen today.

Bitcoin’s Challenge

Despite the progress in institutional infrastructure, Bitcoin's price performance has not fully matched the optimism surrounding adoption. Tejpaul described the broader economic setup as favorable but Bitcoin's performance as disappointing, noting that institutions still tend to view it as a technology-related investment.

This distinction matters. Better infrastructure does not automatically produce immediate price gains. Institutional investors still consider economic conditions, market volatility, regulation, liquidity, and the returns available from other assets.

What Comes Next

The next stage to watch is whether institutions move from testing blockchain services to using them at scale. Growth in stablecoin payments, wider bank participation, continued demand for regulated Bitcoin investment products, and clearer rules could all influence the pace of adoption.

For Bitcoin, the key question is whether this expanding infrastructure eventually translates into sustained demand for the asset itself. Stablecoin growth and Bitcoin investment are connected through the broader crypto ecosystem, but they are not the same thing.

The Bigger Picture

The second wave is about more than new buyers entering Bitcoin. It is about digital assets becoming part of the financial systems that institutions use every day.

If that transition continues, which could matter more in the long run: institutions buying Bitcoin or institutions building their financial operations around blockchain technology?