When it comes to the flow path of capital, a typical pattern can usually be observed: capital holders, such as family offices, high-net-worth individuals, endowments, foundations, pension plans and sovereign wealth funds, are rarely directly involved in investment decision-making. Instead, they tend to allocate their funds to passive investment strategies (e.g., ETFs) or entrust active management strategies to professional investment firms. Based on the recognition of their expertise in a particular area, these capital owners choose to entrust the funds to a professional management team to be responsible for the actual investment operations.

In the current market environment, these traditional institutional investors are gradually exploring the crypto asset space, but the overall participation is still in the early stages. In terms of the order of participation, family offices may be the first to act, mainly attracted by the potential rate of return and liquidity characteristics of the asset class. There are two main ways for them to enter the market: one is to gain easy market exposure by purchasing crypto ETF products; The second is to allocate funds to reputable asset management institutions through venture capital. However, it is worth noting that most institutions have not yet directly participated in the liquidity market or commissioned a professional liquidity manager.

Since 2022, the seed round of venture capital has attracted about $60 billion in capital and supported many startup founders. Some of these entrepreneurs plan to exit through token offerings, while others are looking at traditional listing paths. While traditional IPOs typically take six to eight years, the tokenized exit path can take as little as 18 months, a time lag that makes tokenization a more attractive option for some business models.