Crypto Investors Reallocate Capital to Infrastructure as Liquidity Worries Mount

Senior decision-makers in crypto are shifting capital away from headline-grabbing consumer applications toward the plumbing that enables large-scale, institutional participation. A targeted poll of 242 invite-only attendees at CfC St. Moritz found 85% ranking infrastructure as their top funding priority, with respondents pointing to limited market depth and settlement bottlenecks as the principal constraints on onboarding big institutional allocators. That diagnosis reframes the sector’s near-term priorities: rather than expecting rapid, disruptive product rollouts, investors are pressing for demonstrable execution on custody, clearing, settlement and interoperable rails. The survey’s timing dovetails with visible early-2026 dealflow — about $1.4 billion of committed capital across venture rounds and listings — that has flowed into custody expansion, payment-linked stablecoins, and native on-chain credit facilities, offering concrete examples of where institutional appetite currently sits. Notable transactions and pilot programs cited by market participants include a sizable growth round for a payment-linked stablecoin issuer, a NYSE-listed custodian raising public capital to scale custody services, and institutional credit packages administered on ledgers with meaningful anchor commitments. These commercial developments, together with industry pilots (including reconciliation and clearing experiments mapping ledgered workflows to legacy systems), are reinforcing a compliance-first investment thesis: custody-integrated models, clear legal wrappers and audited stablecoin mechanics are prerequisites for sustainable liquidity. Jurisdictional sentiment is shifting too — the UAE remains highly attractive for regulatory clarity and business conditions, while perceptions of the United States have improved as guidance around stablecoins and bank participation becomes clearer. The improved regulatory texture has not erased caution: respondents reported cooled enthusiasm for IPOs after a busy listing year, citing secondary-market liquidity constraints and valuation recalibrations. For founders and investors this means funding terms and go-to-market plans will be more selective; rounds will favor teams that can evidence deeper order books, faster settlement, and robust compliance frameworks. If executed well, the reallocation toward infrastructure should create a steadier, more institutional-friendly ecosystem and accelerate tokenization of real-world assets; if it stalls, liquidity strains and delayed institutional adoption could persist. Market watchers should track custody technology, clearing-network pilots, stablecoin policy outcomes and tokenization standards as leading indicators of whether this capital rotation produces durable market change.