Why Crypto Finally Makes Sense to Wall Street | Jason Yanowitz

Jason Yanowitz founded Blockworks in December 2017 on the thesis that crypto would institutionalize and require better information infrastructure. The company scaled from zero to twenty-five million dollars in revenue without raising an institutional venture round, has since shut down its news business, and is now evolving into a data company with media and events as a supporting layer. Annual recurring revenue has grown from two hundred thousand to two million to seven million and is now in eight figures, up 110 percent this year.

Blockworks acquired Messari, which had appeared in 47 percent of all Blockworks sales deals as a competing vendor. Yanowitz credits Ryan Selkis as possibly the best analyst crypto has ever had but says Messari raised at astronomical valuations and was too early to the market, allowing Blockworks to acquire it at a large discount to its prior peak valuation. Where Messari went broad across 40,000 assets and every chain, Blockworks went deep in specific niches like Solana and vaults, making the two businesses complementary. The combined entity has 80 employees and Yanowitz describes the integration as the largest engineering and operational undertaking Blockworks has ever attempted, including consolidating two CRMs, two data indexers, and two data warehouses. He expects full integration by end of year.

The core thesis driving the business is that capital markets will move on-chain. Blockworks operates as a two-sided platform serving issuers of on-chain assets on one side and underwriters including exchanges, custodians, brokerages, and financial institutions on the other. Yanowitz frames S&P, a 120 billion dollar business doing 14 billion in revenue, and Moody's, an 80 billion dollar business doing 8 billion in revenue, as competitive benchmarks, arguing both are built for the off-chain world and will be displaced as capital moves on-chain. He cites Robinhood integrating Morpho and Maple directly into its chain app rather than building a large prime brokerage team as an example of crypto reducing the headcount needed to run lending and borrowing operations from thousands to hundreds.

Yanowitz argues the crypto token market is structurally broken. TVL deals allow VCs to deposit large sums into protocols in exchange for token allocations granted outside formal fundraises, then dump those tokens when the deal period ends, creating hidden sell walls. Exchange listing deals similarly require projects to give tokens to exchanges, adding sell pressure unknown to retail investors. He says nearly all early-stage TVL in crypto is incentivized rather than organic, and that the problem is not the deals themselves but the lack of market awareness of their existence.

To address this, Blockworks developed the Token Transparency Framework, an open-source standardized disclosures system modeled on securities law. The B1 is a one-time filing covering 12 criteria including team identity, token supply and allocation, market maker agreements, exchange agreements, prior token sales, prior exploits, and material risk factors. The B2 is a continuously updated filing submitted roughly every six months covering 18 items including influencer marketing arrangements where tokens were paid as compensation. Approximately 65 disclosures have already been filed as of the July 21st recording date. Supporting institutions include Coinbase, Kraken, Binance US, Anchorage, WisdomTree, Paxos, Bitwise, VanEck, and others, with many exchanges incorporating TTF completion into their listing processes. Currently the only penalty for inaccurate filings is reputational damage, but Yanowitz says Blockworks is working in Washington to pursue legal penalties analogous to securities fraud penalties for false S-1 filings.

The TTF is aligned with the CLARITY Act, which would make disclosures mandatory if passed. Yanowitz estimates a 50 to 60 percent probability of passage before the August 7th congressional recess, calling Polymarket odds of 30 to 40 percent a buy. He predicts that if CLARITY stalls, midterm election dynamics will push it further out, with AI and data centers dominating voter issues rather than crypto market structure. He adds that if CLARITY fails, SEC Chair Atkins will still push forward with Reg Crypto, which also mandates disclosures and which Yanowitz views as potentially even better than CLARITY.

Yanowitz says crypto venture deal volume is currently as low as it was in November 2020 and that he personally started buying crypto tokens for the first time in approximately two years, calling the moment a generational buying opportunity while acknowledging prices could fall further if AI rolls over or equity markets implode. He cites a roughly ten billion dollar New York hedge fund holding 300 million dollars in crypto token allocations contingent on CLARITY passing as one example of a much larger pool of institutional capital on the sidelines. He draws a parallel to the GENIUS Act, noting that before it passed there were almost no mainstream stablecoin companies beyond Circle and Tether, and predicts a similar and larger wave will follow CLARITY for crypto tokens. He singles out Hyperliquid as a token that resonates with institutional investors because it has revenues and clear fundamentals, and argues tokens with real revenues, users, and customers will outperform those without.