Crypto Liquidity Shifts: Utility Tokens, NFTs Gain as Regulatory Pressure Eases

Cryptocurrency research firm Bernstein has released an analysis report, highlighting a shift in liquidity flows within the crypto market. The report suggests that liquidity will return to utility-driven sectors such as Decentralized Finance (DeFi), GameFi, and Non-Fungible Tokens (NFTs), as regulatory pressures ease.

The report notes that previously, the crypto market was forced to focus on "useless" meme coins to avoid regulatory crackdowns on utility tokens and NFT projects. However, with the Trump administration's regulatory easing, analysts expect liquidity to flow back into these utility-driven sectors. This shift is supported by the nomination of cryptocurrency-friendly regulator Paul Atkins to lead the SEC, pending Senate confirmation. Atkins is expected to establish a crypto working group led by Republican Commissioner Hester Peirce, further indicating a policy shift.

The report also highlights the potential impact of the SEC's willingness to withdraw securities violation charges against Coinbase and terminate the investigation into OpenSea. These actions demonstrate a policy shift that could propel Bitcoin's price in the coming months, maintaining the year-end target price of $200,000 despite recent market downturns.

Stablecoins and Real World Asset (RWA) tokenization are another focus of the report. With the expected implementation of stablecoin and digital asset securities regulatory frameworks, stablecoins are expected to have an early impact on cross-border B2B payments, interbank settlements, and remittances. As clarity emerges on crypto asset securities regulation, equity and debt tokenization will open new avenues for corporate financing, and the demand for stablecoins as settlement currency will also grow. This is expected to expand the potential market for trading platforms and brokers, driving trading volume growth and increasing platform float income.