The State of Crypto Capital Markets Mid-2025 How serious capital views flows, risks & opportunities right now. This is not for moonboys. This is how allocators think. 👇🧵 ❶ First principle: crypto capital markets are maturing but unevenly. • Retail noise remains high. • Institutional allocation is highly selective. • Liquidity fragmentation defines the battlefield. Understanding the structure is edge. ❷ The capital stack today: • Venture: slowing, but high-conviction early-stage still raising. • Public markets: ETF flows + centralized liquidity dominate majors. • Private credit & RWA: emerging quietly. • Infrastructure funds: building long-tail positions. ❸ Risk #1 Liquidity Fragility • Depth remains shallow outside $BTC $ETH $SOL. • Large position exits can move markets 10–30%. • Token unlocks still destabilize midcaps. Funds model liquidity before sizing positions. ❹ Risk #2 Regulatory Arbitrage • US: compliance-heavy, slow-moving. • Asia: faster capital mobility, aggressive trading. • Middle East: rising allocators, sovereign wealth probing infra. • EU: fragmented adoption. Allocators position around jurisdictional edges. ❺ Risk #3 Narrative-Driven Rotations 2025 narratives driving flows: • Restaking (EigenLayer, Babylon, Symbiotic) • Modular chains (Celestia, Dymension, Avail) • RWAs (Ondo, Maple, Backed) • ETH ETF flows • Bitcoin L2 speculation Funds monitor narrative momentum vs exit liquidity risk. ❻ Where serious capital sees opportunity: • Infrastructure layers (data availability, restaking primitives) • Native yield (real revenue, not emissions games) • Interoperability (modular settlement layers) • Compliance rails (KYC DeFi, tokenized treasuries) ❼ Who is deploying? • Crossover funds: building quiet positions. • Family offices: selective ETH, SOL, BTC exposure + infra bets. • Sovereigns: strategic infra plays (RWA, CBDC pilots). • Smaller crypto funds: rotating aggressively into restaking & modular narratives. ❽ The Mental Model: Convex Liquidity → Major assets = institutional railroads. → Midcaps = trading arenas. → Micros = high beta rotation plays. Funds size risk-adjusted exposure across this curve. In summary: Crypto capital markets are not immature, they’re bifurcating. Serious capital moves: • Patient sizing • Liquidity-adjusted bets • Narrative-aware rotations • Regulatory risk hedging. If you allocate serious capital, or want to think like funds: 🔖 Bookmark this map. 🧠 Frameworks > hype. 🔬 Follow for more institutional-grade breakdowns.