AI Funding Pulls Liquidity From Crypto, GSR Markets Head Says

"I'd actually frame tokenization less as a new trading product in its own right and more as a challenge to how traditional banking and settlement rails work today," Hallarn said. "The bigger opportunity is in fixing the plumbing, not just wrapping an asset in a token."

GSR sees its core market-making discipline as "quite portable" across crypto, commodities and securities, with differences depending on each market's structure. The firm is developing price feeds and infrastructure bridging traditional finance with crypto.

A crypto bull run, Hallarn said, depends on macro conditions. "If AI-related investment cools off and the Fed starts cutting rates, liquidity should come back into the system, and that's the kind of environment that could support another Bitcoin move higher."

He was less certain about smaller cryptocurrencies, arguing the sector must deliver on promised use cases to sustain long-term value. Despite the slowdown, Hallarn said client needs haven't changed. "Clients need liquidity, hedging, and execution regardless of where we are in the cycle."