Wintermute: Seven Key Areas We Will Focus Our Investments on in 2026

Original link: https://x.com/wmt_ventures/status/2016471296595698008

Compiled by: Ken, Chaincatcher

For decades, the internet has enabled information to flow freely across borders, platforms, and systems. However, the transfer of value has lagged behind. Currency, assets, and financial agreements still circulate through fragmented infrastructures built on outdated tracks, national borders, and intermediaries, which extract rents at every stage.

This gap is closing at an unprecedented pace. It creates opportunities for companies that can directly replace traditional clearing, settlement, and custody functions. The infrastructure that allows value to flow as freely as information is no longer a theoretical discussion; it is being built, deployed, and used at scale.

For years, the crypto space has primarily existed on-chain, disconnected from the real economy. This is changing. Crypto technology is becoming the clearing and settlement layer that the internet economy has long desired; a system that operates around the clock, is transparent, and permissionless.

The following themes represent our predictions for the direction of digital asset development by 2026, as well as the directions that Wintermute Ventures is actively supporting in founders.

Everything is Tradable

With new financial primitives such as prediction markets, tokenization, and derivatives, an increasing number of assets and real-world outcomes are becoming tradable. This shift provides a liquidity layer for areas that historically lacked markets.

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

Prediction markets will continue to expand as consumer products and new financial tools, supporting hedging, outcome-linked trading, and expressing opinions on granular events. They are also beginning to replace parts of traditional financial infrastructure.

Insurance is a compelling example: outcome-based markets can provide cheaper and more flexible hedging solutions than traditional insurance or reinsurance by directly pricing specific risks rather than bundling them into broad products. Users do not have to purchase hurricane insurance that covers an entire region; instead, they can hedge against specific wind speeds at specific locations and times. Over a longer time frame, these unique risks can be selected and packaged through smart agent workflows to meet individual needs.

As the infrastructure for prediction markets scales, entirely new categories of data products will emerge around topics that have never been priced. We expect to see markets specifically designed for trading and quantifying objective metrics such as perception, sentiment, and collective opinion. These emerging markets are a natural extension of decentralized finance, unlocking new ways to price and exchange information itself. When everything is tradable, the infrastructure that provides liquidity, enables price discovery, and ensures settlement becomes crucial.

This structural shift will concentrate value at the infrastructure layer, directly reshaping the way capital is allocated. We are actively supporting teams that are building core market and settlement infrastructure, data layers for verification and proof, and new data products emerging to finance previously untradeable outcomes. We are also focused on novel abstract models that make these markets programmable and composable, allowing them to be embedded in real-world workflows and replace parts of traditional financial and insurance infrastructure.

Stablecoins as the Trust Layer, Banks Handling Transitional Settlements

Digital assets lack the robust facilities that serve as the lubricants in traditional finance, such as settlement banks and clearinghouses. While stablecoins have achieved open access and programmable value, fragmentation due to the lack of settlement infrastructure limits their application.

As stablecoin issuers adopt different collateral models across ecosystems, the demand for an interoperability layer that can reliably combine these assets is growing. To expand this system, the crypto space needs infrastructure that can achieve net settlement, conversion, and clearing across stablecoins and chains without introducing additional credit risk, liquidity risk, or operational overhead.

The missing abstraction layer lies in transferring conversion and credit risk to stablecoin issuers through balance sheet-based interoperability, rather than forcing end users to manage foreign exchange, routing, or counterparty exposure when trading across stablecoins. We see this as an on-chain "agent bank" business that can achieve near-instant settlement and provide open access to application builders. We expect to see more companies positioning themselves as coordination layers between issuers and applications.

Markets Will Favor Durable Stable Income Over Temporary Incentives

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

Valuations will be more closely anchored to sustainable earnings and forward-looking projections, moving towards cash flow-based frameworks. Annualizing short-term, volatile monthly expenses is no longer a reliable way to measure enterprise value, as the quality of earnings and consistency of incentive mechanisms will become central to valuation. If tokens lack a reliable value capture path, it will be challenging to sustain demand after the speculative phase.

As a result, the number of companies issuing tokens at the outset will decrease. Many companies will default to a "equity-first" structure, primarily using blockchain as backend infrastructure, which is largely invisible to users and investors. Even when using tokens, issuance will increasingly lean towards being after product-market fit is clear, with revenue, unit economics, and distribution channels validated, and stakeholder incentive mechanisms aligned.

We believe this shift is a healthy and necessary evolution that benefits the entire ecosystem. Founders can focus on building sustainable businesses rather than prioritizing token incentives and demand too early. Investors can use familiar financial frameworks to evaluate companies. Users will receive products designed for long-term value.

Decentralized Finance Will Merge with Fintech

The future of finance is not decentralized finance or traditional finance: it is a fusion of both. A dual-track architecture allows fintech applications to dynamically route transactions based on cost, speed, and yield. Breakthrough consumer applications will resemble traditional fintech products, with underlying technologies such as wallets, bridges, and blockchains being fully abstracted. Capital efficiency, yield, settlement speed, and transparent execution will define the next generation of financial products.

As user experience merges with fintech, the industry is still rapidly expanding at the foundational level. Tokenization and highly composable financial primitives are driving this growth, achieving deeper liquidity and more complex financial products.

The importance of distribution capability will surpass interface ownership. Successful teams will build "backend-first" infrastructure that integrates with existing platforms and channels rather than competing as standalone applications. Personalization and automation, along with increasingly sophisticated AI, will improve pricing, routing, and yield in the background. Users will not consciously choose decentralized finance; they will choose better products.

Privacy Becomes a Fundamental Requirement

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

In practice, this enables banks to assess creditworthiness without accessing transaction records, employers to verify employment without disclosing salaries, and financial institutions to prove reserves without disclosing holdings. The concrete extension of this vision in real life is that businesses no longer need to store vast amounts of data, freeing them from costly and cumbersome data privacy regulations. New technologies such as private shared states, zero-knowledge transmission security protocols, and multi-party computation unlock under-collateralized lending, layered financing, and new on-chain risk products, transferring entire categories of structured financing activities that were previously unattainable onto the chain.

Regulation Shifts from Compliance Barrier to Distribution Advantage

Regulatory clarity has shifted from a confrontational barrier to a standardized distribution channel. While the "permissionless" nature of early decentralized finance remains an important engine of innovation, the emergence of operational frameworks such as the U.S. "Genius Act," the European "Crypto Asset Market Act," and Hong Kong's stablecoin regime is providing greater clarity for traditional institutions. By 2026, the key will no longer be whether institutions can use blockchain, but how they leverage these guidelines to replace traditional underlying architectures with high-speed on-chain channels.

These standards will drive the emergence of more compliant on-chain products, regulated inbound and outbound channels, and institutional-grade infrastructure without mandating complete centralization, thereby increasing institutional participation.

Regions that combine clear rules with rapid approvals will increasingly attract capital, talent, and experimentation, accelerating the normalization of on-chain value distribution in native cryptocurrencies and hybrid financial products, while sluggish institutions will fall behind.

The Internet Economy Built on Crypto Technology

The maturity of infrastructure is the main thread running through this transformation. Crypto technology is becoming the clearing and settlement layer of the internet economy, allowing value to flow as freely as information. The protocols, primitives, and applications being built today are unlocking new forms of real economic activity and expanding possibilities on the internet.

At Wintermute Ventures, we support founders in building this infrastructure. We seek teams that possess both deep technical expertise and strong product thinking. We look for teams that can deliver solutions that users genuinely want to use. We seek teams that can operate within regulatory frameworks while advancing the core principles of decentralized systems. We look for teams that can create business models with long-term impact.

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