Ep. 762 Why the Next Big Crypto Winners Might Not Have Tokens with David Wachsman

Crypto’s next major winners may not issue tokens at all, David Wachsman argues. As U.S. regulatory uncertainty makes it difficult for token issuers to share revenue or profits without risking a security designation, some revenue-generating businesses cannot distribute profits to tokenholders even though they could distribute them to shareholders. Wachsman expects some companies to use public shares to give communities ownership, sometimes alongside tokens, and sees overlap between tokenholders and shareholders. In some cases, stock may serve a community better than a token with limited value.

Tokens and shares could coexist with different roles: a token might provide discounted services without accruing value from the company, while shares represent ownership. Newer token launches are offering more value accrual, and meme coins are likely to persist, Bryce said. Buybacks, burns, and profit-sharing arrangements have become more popular, with examples including Hyperliquid, Pump.fun, and Uniswap. Wachsman cautioned that buybacks could lead regulators to treat a token as a security if it is used like one, while noting that he is not a securities lawyer. Tokens with revenue or dividends attached are appearing as SEC and CFTC frameworks become clearer, but the proposed Clarity Act has not passed.

Wachsman expects tokenized equities and broader financialization to become nearly ubiquitous within a decade, though trading remains limited today. Tokenized shares could also become collateral in DeFi. He sees room for Bitcoin, ETH, other digital assets, layer-one networks, app coins, tokens, equities, and debt to coexist, with hybrid portfolios combining stablecoins, established digital assets, and tokenized instruments becoming more common. In his view, digital assets will form part of most people’s portfolios over the next five, 10, or 20 years. Younger people’s dissatisfaction with traditional brokerage models and wealth advisers, and preference for making their own financial decisions, may support that shift.

Wachsman’s Hawkeye Digital, which trades OTC under ticker HWKE and has an implied market capitalization of roughly $200 million, invests its own capital and helps companies raise money, pursue mergers and acquisitions, and access public markets. It is betting that more crypto and adjacent-industry businesses, including small-cap companies, will go public. Wachsman is interested in mature businesses with product-market fit, strong founders, and sometimes revenue—companies between venture stage and established public status. He expects audits and scrutiny of SEC filings to become more common. Hawkeye also plans to pursue merchant-banking deals.

Hawkeye looks across crypto-related sectors, including tokenization platforms and service providers, custody, and cybersecurity. Wachsman sees custody as foundational to many crypto businesses and said AI-enabled hacks and phishing are increasing security concerns; quantum security is interesting but less immediate. He also expects substantial demand for AI data-center capacity despite concerns about oversupply, creating opportunities in the commodities and infrastructure required to build those facilities. Financial institutions’ need for digital-asset capabilities could generate acquisitions: some large institutions have shared lists of capabilities they want to buy because they cannot build them quickly enough. Corporate-development teams weigh acquisitions against building internally.

Wachsman expects finance and commerce to develop through traditional finance and crypto becoming more intertwined, rather than one replacing the other. Crypto-native companies such as Coinbase and Kraken could become financial-services giants over the next 50 years, while established institutions are likely to buy or build crypto capabilities, including bundled institutional services such as prime. Partnerships can provide capabilities companies cannot develop themselves. Brendan cited Coinbase’s work with Aerodrome on its tokenized-stock section; on the day he spoke with Aerodrome’s CEO, just under 60% of tokenized-stock volume on Ethereum was going through Aerodrome. He expects more partnerships between traditional and crypto companies in stablecoins, DeFi, and tokenization.