Why Institutional Capital Is Becoming More Selective in Crypto

The latest KuCoin Ventures Weekly Report highlights an important shift in institutional behavior between June 22 and 28. On the surface, market conditions offered little reason for optimism. Tightening financial conditions, sticky inflation, a hawkish Fed, and a seventh straight week of Bitcoin ETF outflows should have sent institutional capital for the exits. However, institutional positioning suggested otherwise. Instead, the week’s developments pointed to a different trend. Investors became far more selective, moving toward sectors with real yield, real fundamentals, and real utility rather than fleeing altogether.

Three areas absorbed most of that attention: real-world assets (RWAs), DeFi lending, and prediction markets. Aave deepened its footprint in institutional on-chain lending, Kraken emerged as a possible buyer into that same infrastructure, and prediction markets k…

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