The Alpha Is in the Plumbing

For more than a decade, digital assets lived on the margins — promising, volatile, underestimated. The enthusiasm was real, but the structure wasn't. Infrastructure was immature. Regulation was ambiguous. Institutional allocators treated the space as an intellectual exercise rather than an asset class.

2024 and 2025 changed that.

At the Digital Assets Conference in São Paulo, I sat down with three people who've been building in this space long before it occupied the front pages of the Financial Times: Roberto Dagnoni (Mercado Bitcoin), Ben Lizana (SoftBank), and Guilherme Gomes (Oranje BTC). 

What follows is my synthesis of the most important insights from that conversation — and a framework for understanding what the next decade will look like, not just for crypto, but for money as we know it.

THE INSTITUTIONAL AWAKENING

The January 2024 ETF approval marked the inflection point — not because it introduced a new product, but because it removed the last credible excuse for institutional non-participation.

For years, allocators cited regulatory ambiguity, custody risk, and reputational exposure to justify staying on the sidelines. The ETF removed all three in a single stroke. Exposure to Bitcoin suddenly looked like exposure to any other asset: a ticker, a prospectus, a familiar wrapper.

The market response was immediate. Ten billion dollars flowed into Bitcoin ETFs within seven weeks. Gold ETFs took two years to reach the same milestone. That speed wasn't mania — it was pent-up demand finally finding a compliant channel.

More importantly, the ETF revealed that institutional capital wasn't skeptical of Bitcoin's fundamentals per se. It was skeptical of the career risk associated with proposing allocation. Portfolio managers don't get fired for missing upside. They get fired for taking positions that look reckless in hindsight. Once BlackRock, Fidelity, and other blue-chip names attached their reputations to the product, the calculus inverted.

The asset class now sits at $4 trillion. Coinbase joined the S&P 500. By year-end, the U.S. will likely have 50 crypto-related public companies, up from essentially Coinbase plus a handful of miners just eighteen months ago. Circle has filed to go public, and several other infrastructure firms are preparing the ground for eventual listings as regulatory clarity improves.

The story is no longer about speculation. It's about infrastructure becoming investible.

LATAM’S UNFAIR ADVANTAGE

The case for digital assets becomes more intuitive when your financial system has already failed you.

In developed markets, crypto must displace systems that function reasonably well. Banks hold deposits. Payments clear. Currency remains stable. The value proposition has to overcome inertia, skepticism, and the reality that most people's financial lives "work."

Emerging markets operate under different assumptions — because they've lived different histories.

Hyperinflation that resets savings overnight. Multi-currency households hedging existential risk. Remittance fees that extract 5–10% of every transfer. Settlement windows measured in days, not seconds. Credit markets rationed by bureaucracy rather than risk.

These aren't abstract problems; they are biographical.

Brazil's relationship with financial infrastructure was forged through repeated failure. Between 1942 and 1994, the country cycled through six currencies. An entire generation watched family savings evaporate again and again. The psychological residue of that experience lasts decades.

When you've watched your government erase your parents' wealth, the question isn't whether you trust crypto. It's why you would trust the system that already failed you.

This trauma produced infrastructure that moves faster than developed markets ever needed to build.

Brazil's central bank couldn't tolerate three-day settlement windows during periods of triple-digit inflation. Pix emerged not from consumer demand but institutional necessity. It now processes 60+ billion transactions annually, with weekend volumes equal to weekdays.

Before Pix, commerce slowed every Friday evening. Now it never stops.

The central bank's credibility matters here. This is the same institution that tamed hyperinflation, guided the country through global crises, and consistently acted ahead of developed-market peers. When that institution pilots Drex — programmable rails for tokenized assets — the signal carries far more weight than when a startup makes the same pitch. Drex isn't an experiment. It's the next layer of infrastructure from regulators who earned trust through decades of competent crisis management.

Argentina illustrates the consumer side even more starkly. When nearly a third of a population uses crypto — and the majority of those transactions involve dollar-denominated stablecoins — the motivation isn't ideology. It's self-preservation. A dollar-pegged token isn't a crypto bet when your domestic currency loses half its value in a year — it's the most rational savings vehicle available.

The strategic implication is simple: markets with the most acute financial pain may leapfrog markets with the most capital. Infrastructure built for survival scales differently than infrastructure built for convenience. The emerging market advantage isn't about being early to trends — it's about having no alternative but to build what developed markets are still debating.

WHERE THE REAL ALPHA IS

Most conversations about crypto focus on speculation. The panel shifted the frame toward something more fundamental: trapped value.

Emerging markets contain vast pools of assets that exist on paper but cannot move — not because they lack worth, but because the systems required to transfer, trade, or collateralize them were never built. This is the opportunity that blockchain infrastructure is uniquely positioned to unlock.

Real-world asset tokenization represents the clearest example. Roberto estimates that Brazil alone has $500–600 billion in assets that are effectively illiquid due to structural inefficiencies.

Consider real estate. In Brazil, transferring property ownership can take 15-45 days under normal circumstances, longer with financing — requiring notary visits and a bureaucratic process that hasn't fundamentally changed in decades. This isn't just inconvenient — it's economically destructive. Liquidity constraints depress asset values. Sellers accept discounts because they can't wait. Buyers can't act quickly on opportunities. Capital sits frozen while paperwork moves through systems designed for a pre-digital era.

• The same pattern repeats across asset classes. Vehicle financing with settlement processes unchanged since the 1990s. Credit instruments trapped in analog workflows that require physical signatures and manual reconciliation. Agricultural receivables that could be collateralized but aren't because the infrastructure to verify, fractionalize, and trade them doesn't exist.

• Tokenization solves this by 3 mechanics: programmability, fractionalization, and 24/7 settlement.

• Programmability means smart contracts can encode the rules of ownership transfer, compliance requirements, and payment flows directly into the asset. The process that currently requires lawyers, notaries, and weeks of back-and-forth can be reduced to code that executes automatically when conditions are met.

• Fractionalization means assets that were previously accessible only to institutional buyers — because the minimum viable transaction size was too large — can be divided into smaller units. A $10 million commercial property becomes accessible to thousands of smaller investors. A credit portfolio that only banks could hold becomes available to retail savers seeking yield.

And 24/7 settlement means capital doesn't sit idle waiting for business hours, banking holidays, or clearing windows. The money moves when the transaction happens. In a high-interest-rate environment like Brazil's, the time value of money trapped in settlement windows is substantial.

Mercado Bitcoin's RWA business is growing 3x this year because demand always existed. Infrastructure finally caught up.

Cross-border payments represent the second major opportunity — and the most visible inefficiency for everyday users.

Credit card FX spreads routinely exceed 10%. Wires to Europe take four days. Remittances to LATAM cost 6–7% of value.

The barrier here isn't technological — it's institutional. Banks have little incentive to disrupt a system that generates reliable fee income. Payment networks profit from the spread. And consumers have been conditioned to accept these frictions as normal because they've never experienced an alternative.

Stablecoins collapse these frictions immediately. Once you've moved value across borders in seconds for pennies, the legacy system feels like what it is: an artifact of rent extraction.

Remittances follow the same logic. Latin America receives over $160 billion annually in remittances — money sent by workers abroad to families back home. The average cost to send these funds is 6-7%, meaning roughly $10 billion in value is extracted annually by intermediaries.

For a family receiving $500 per month from a relative working in the United States, a 7% fee represents $420 per year in lost income. That's groceries, school supplies, medical care — resources that never reach their intended destination because the payment infrastructure was designed to serve institutions rather than consumers. Crypto rails compress these costs dramatically.

Across all three categories, the pattern is the same: the current financial system traps value because infrastructure hasn't caught up to technology. The alpha isn't in the token. It's in the plumbing.

WHERE THE OPPORTUNITY IS NOT

For every real opportunity, there are distractions that must be separated from the core thesis.

ICO-style issuance

Between 2017 and 2018, over 2,000 token sales raised somewhere between $10 and $20 billion. Most of it evaporated. Projects raised capital with little more than a white paper and a Telegram channel. Investors bought tokens with no legal claim on anything — not equity, not revenue, not assets. When prices collapsed, there was no recourse.

The lesson isn't that democratized capital formation is flawed. The lesson is that disintermediation without legal infrastructure creates a vacuum that bad actors fill faster than good ones. Capital formation requires trust, and trust requires accountability mechanisms that most ICO structures deliberately avoided.

NFT speculation

In 2021, a JPEG of a cartoon rock sold for $1.3 million. Then the floor dropped. And kept dropping.

Retail investors lost real money. But the deeper damage was reputational. Every headline about million-dollar rocks became a punchline that discredited the underlying technology — despite NFTs having genuine utility for provenance tracking, royalty enforcement, ticketing, and credentials.

Here's the pattern: in many new asset classes, speculation precedes utility. Railroads had their bubble before they transformed commerce. The internet had its dot-com crash before it became an everyday infrastructure. But the speculation phase leaves scars that legitimate applications have to overcome.

Unregulated DeFi

The technology works. Smart contracts can execute complex financial transactions without intermediaries. The problem was everything else.

Over $5 billion has been drained from DeFi protocols since 2020. In 2022 alone, hackers stole over $3 billion. Opaque governance meant no accountability when things went wrong. Rug pulls became routine.

The core proposition remains valid — traditional financial infrastructure is slow, expensive, and exclusionary. But the path forward likely runs through regulation, not around it. The next generation of DeFi will probably look less like a crypto-anarchist experiment and more like traditional finance with better infrastructure.

These three failures share a common structure: genuine technological capability, deployed without the institutional infrastructure required to make it trustworthy, exploited by bad actors before legitimate use cases could establish themselves.

ICOs proved you could raise global capital instantly — and that instant capital formation without investor protections attracts fraud.

NFTs proved you could create verifiable digital ownership — and that verifiable ownership of worthless things is still worthless.

DeFi proved you could build financial infrastructure without intermediaries — and that intermediaries exist for reasons beyond rent-seeking.

In each case, the technology wasn't the problem. The missing institutions were.

THE GENERATIONAL DIVIDE

One of the most important forces shaping adoption has nothing to do with technology or regulation. It's generational succession.

Roberto shared data from Mercado Bitcoin's customer research: for ages 20-35, digital assets rank as the second preferred asset class. For ages 45-60, they rank ninth.

Four forces explain the gap.

Life stage. The 55-year-old has wealth to protect. The 30-year-old has human capital but little financial capital. When you're preserving a nest egg, volatility feels reckless. When you're building from a smaller base with decades ahead, the same volatility looks like opportunity.

Accessibility. Crypto lives where younger generations already spend time — mobile apps, 24/7 availability, no minimums. For a 28-year-old, buying Bitcoin is as frictionless as ordering food delivery. For a 55-year-old, it requires learning new platforms and trusting unfamiliar interfaces.

Social proof and identity. Crypto carries cultural weight that growth stocks don't. For many younger investors, it's an identity marker. Discussing your thesis signals sophistication. Having no opinion signals being out of touch. When your friends talk about something constantly, you eventually participate.

Different windows of awareness. The over-50 cohort's primary exposure came through headlines about crashes and hacks. The under-35 cohort has been immersed in the full spectrum — bull cases, bear cases, technical debates, meme culture. This doesn't mean younger investors are better informed. But they've had more time to form views and test them against volatility.

This dynamic is reshaping family offices. The heir advocates for allocation. The patriarch resists. The CIO mediates. Education fills the gaps. But what ultimately moves the room is external signaling — BlackRock, Fidelity, JP Morgan.When the institutions you already trust change their stance, the psychological burden of skepticism shifts.

The strategic implication is clear: the addressable market for digital assets expands as generational succession proceeds. The 35-year-old heir will eventually control the capital. The 25-year-old analyst will eventually become CIO. The generation for whom digital assets rank near the top of preferences will eventually make allocation decisions.

For founders, this means building for the long cycle. The customers of 2030 are forming preferences now.

For allocators, it means recognizing that the window for "early institutional" positioning is narrowing. The social proof cascade has begun.

LESSONS FROM THE LAST CYCLE

I asked each speaker what the last cycle taught them that they wish they had known earlier. Their answers converged on a few core insights.

Skepticism is healthy. The social cost of skepticism during a bull run is real — you look slow while others get rich. The 2021 cycle punished skeptics for months before vindicating them completely. The lesson isn't that skepticism always pays. It's that the pressure to abandon it is part of the mechanism that creates bubbles.

Narrative is not thesis. A narrative explains price movement. A thesis is a falsifiable claim about value creation. In 2021, narratives justified enormous capital flows without requiring falsifiable predictions. The investors who survived learned to ask: what would have to be true for this to be worth the current price? And what evidence would change my mind?

Real-world utility outlives speculative cycles. The projects still standing are the ones where someone, somewhere, is using the product to solve an actual problem. The survivors of 2022 had users who needed them, not just holders who believed in them.

Cycles compress, but they don't disappear. Information travels faster. Feedback loops are tighter. But the underlying psychology — greed, fear, FOMO, capitulation — remains unchanged. Planning for cycles means planning for 70% drawdowns, even in assets you believe in.

Education compounds. Roberto added something interesting: we underestimate how many people were educated during the bear market. When the new wave comes, you have much more people educated — and the waves are stronger.

This observation explains something that puzzles outside observers: why does crypto keep coming back? The asset class has "died" hundreds of times according to headlines. Each crash is supposed to be the final disillusionment. And yet, each recovery is larger than the last.

The answer is that crashes don't just destroy capital — they also filter for conviction and create space for education. When prices are falling, the speculators leave. The people who remain are either true believers or genuinely curious. And with the noise gone, they can actually learn. They read white papers. They experiment with wallets. They understand the technology rather than just the price action.

This cohort becomes the foundation for the next expansion. They're not buying because number go up. They're buying because they understand what they're buying. That's stickier demand.

THE FIVE-YEAR BET

I ended with a fill-in-the-blank question: "In five years, digital assets will be as indispensable to finance as _____ is today."

• Roberto: "Money."

• Guilherme: "Gold — but we'll have surpassed it in total market value."

• Ben: "Any core asset class allocation."

Bitcoin is currently around 10% of gold's market cap. The panel's consensus: that ratio inverts within five years.

The playing field is set. The question isn't whether digital assets become mainstream infrastructure. It's who builds the rails — and who gets left explaining why BlackRock, JP Morgan, and Fidelity were all wrong.

Last week, we hosted an exceptional founder talk featuring Dileep Thazhmon (Jeeves) and Bruno Maimone (Warburg Pincus) — a conversation packed with the kind of tactical insights that rarely make it into public forums.

From what fundraisable truly looks like in practice, to the unexpected realities of launching a business in Brazil as a foreign founder, to the nuances of team building at scale, this session was a masterclass for both operators and investors. The discussion was so rich that it deserves its own special issue — but until then, here are a few photos from the evening.

If you want to join us for future founder conversations, make sure you’re subscribed to The J Curve Insider and follow us across social channels - here and here.

Big things ahead.

Thanks for reading,

Olga 

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