Sandy Kaul: The First Institutional Bull Run Has Begun (Strong Hands Now)

Sandy Kaul sees crypto as a major portfolio opportunity over the next two generations and says this is a period for institutions to build. The host calls the current market crypto’s first institutional bull run and expects the following year to be positive. Kaul describes a market that has washed out speculators and shifted assets from “weak hands” to “strong hands,” giving patient investors better entry points. She considers quiet, uneventful markets attractive times to enter, while the host warns that waiting until a bull run is underway can leave investors at a disadvantage. Kaul adds that institutional positions may help form a bottom because that capital is stickier and less likely to be swayed by volatility.

Franklin Templeton is assembling a crypto investing team as mainstream institutions increasingly recognize crypto as an important technology set alongside AI. The firm has just over $3 billion in on-chain assets and aims to exceed $5 billion by year-end; Kaul says that figure could double or triple by this time next year. She places that buildout within Franklin Templeton’s scale—$1.8 trillion in global assets—and its 80-year history. Its first tokenized fund launched in April 2021 and has operated 24/7 since launch, an example of the firm’s ongoing work with on-chain products.

Kaul expects payment wallets and crypto wallets to merge into an important interface for investing and portfolio management. She sees AI agents working through that interface to provide investment advice and act according to goals set by users. Such agents could continuously scan collateral pools, decentralized finance pools and exchanges, then make portfolio decisions on the user’s behalf. The opportunity depends on combining access to financial services with the ability to assess opportunities and act across markets, rather than treating wallets only as places to hold assets.

Regulated investment products still require fiat cash, so subscriptions and redemptions depend on converting stablecoins or crypto into fiat. Kaul identifies that conversion as a practical requirement for bringing on-chain assets into regulated products. Franklin Templeton’s money market fund can calculate interest intraday, allowing investors to earn for the precise time they hold it rather than only across a coarser holding period. The example underscores how tokenized products may alter the timing and mechanics of investment, while also showing that connections between crypto assets and conventional cash remain essential.

Kaul points to decentralized digital identity, agentic AI and micropayments, and post-quantum computing and codes as areas with potential to compound. Bitcoin, she says, will remain important, but the investment case for other parts of the crypto ecosystem has strengthened enough to make them portfolio opportunities too. Her view therefore extends beyond Bitcoin without implying that all crypto assets are interchangeable or equally promising; the identified areas represent distinct potential applications and technologies.

Kaul says KYC and AML checks could be performed when a user signs a transaction, with eligibility required for verification. But checks can become stale when firms update them infrequently, and she says an 18-month update cycle would be shocking. Making KYC and AML composable across assets and chains requires shared standards for smart-contract templates, language, data fields and processes. More broadly, financial firms are moving from building separate infrastructure toward plugging into shared networks. Common templates could support regulatory checks and help open access to the $150 trillion of assets that trade. Kaul says the Clarity Act stalled over ethics, not disagreement about how the assets should operate, and considers that issue temporary.