Citrini Research has left Bitcoin out of its latest crypto investment strategy, and the reasoning goes deeper than the familiar argument over whether the world’s largest cryptocurrency is overpriced. The research firm is instead betting on blockchain infrastructure — the idea that artificial intelligence can revolutionize the flow of money, and that investors need exposure to the companies and networks processing those transactions.

The omission is notable because Bitcoin has long served as the default anchor of institutional crypto allocations, so a strategy that sets the largest cryptocurrency aside entirely points to a different route to exposure — the rails rather than the asset itself.

That thesis may sound far-fetched until the current capabilities of AI are considered. Picture a person instructing a digital assistant to shop for a cheaper mortgage, move savings into a more lucrative bank account, and invest idle cash, all while the account holder goes about their day.

Citrini believes that future is drawing closer, and that banks are going to hate it. Customers would no longer need to park deposits with their existing institutions, because machines would be programmed to hunt for better returns on their behalf.

“Our financial system was not designed for this future. It’s slow, fragmented and gate-kept by layers of intermediaries, legal authorities and KYC processes. It was built by humans, for humans.”

In the firm’s view, rails built for human customers and human-paced compliance processes may be poorly suited to machine-driven finance. Its concern is that financial institutions could struggle once millions of automated assistants start moving customer money continuously, potentially draining deposits away from banks offering uncompetitive rates.

Two outcomes are possible in that scenario, according to Citrini. Either incumbent banks innovate to allow more fluid movement of software-driven money, or new financial networks emerge to do the job themselves.

A real purpose for crypto

Blockchain technology has spent roughly 15 years making payments possible without any closing time. The problem has always been giving people enough good reasons to use it. The industry’s history has hardly been convincing: between FTX, questionable tokens, complicated wallets and endless transaction fees, crypto has handed skeptics plenty of ammunition. Most investors were not exactly desperate to learn how blockchain bridges worked just to buy another dog-themed coin.

Against that backdrop, Citrini argues the pieces are finally falling into place:

“Both of those things are now changing. Financial assets are being tokenized and brought onchain. The worlds of traditional finance and crypto are merging.”

The arrival of AI agents adds another dimension, because machines can operate financial applications without struggling through the confusing interfaces that frustrate human customers.

Citrini draws an analogy to the early internet. Nobody needed to know how to operate TCP, IP or HTTPS to view a web page; browsers handled those layers on their own. The firm hopes blockchain technology will ultimately work the same way.

To test the idea, the researchers went where few investors venture:

“We felt the urge that strikes any thematic investor on the cusp of a big idea: to investigate. So I downloaded Coinbase Wallet, loaded up $1,000 and went where very few investors return from with a positive ROI: the onchain trenches. Expecting to get rug-pulled, we were surprised by my findings.”

According to Citrini, it discovered that while investors — including Citrini Research itself — were absorbed in a running debate over GPUs and memory constraints, a system of financial applications had been quietly emerging that is, in many respects, comparable to traditional finance (TradFi). It is a world extending far beyond the standard get-rich-quick scams, ranging from tokenized treasuries, equities and options to programmable loans, payments, yield farms, and even entire applications that simply did not exist a few years ago.

Hyperliquid, Robinhood and regulators reshape the picture

The turning point cited by Citrini came in March, during the Iran crisis, when traders needed somewhere to respond to developments in the oil market over a weekend. Hyperliquid made it possible to trade futures contracts based on oil while the regular exchanges were closed — a demonstration, for the firm, that onchain markets can stay open precisely when conventional infrastructure cannot.

Separately, Robinhood (HOOD) launched its Stock Tokens product, pushing tokenized stocks toward maturity beyond standalone trading platforms. What makes this notable is that these assets can now be transferred between applications.

“To grasp the scale… In September, Solana temporarily processed more trades than the NYSE…and while most of this activity is surely bots, meme pairs and other nonsense, that still says quite a lot about the traction this is getting.”

Citrini acknowledges that raw transaction counts do not by themselves determine economic value, but they do show the extent to which decentralized networks are handling activity.

Washington, meanwhile, can no longer be ignored. Following the failure of the CLARITY Act — a market-structure bill aimed at clarifying how digital asset trading is regulated — in the Senate, the SEC introduced a five-year exemption from regulation for some stock-token trading operations. In a parallel development, Coinbase (COIN) has a proposed US perpetual futures offering under review by the CFTC. How the exemption is applied in practice, and how the CFTC review proceeds, are among the regulatory milestones most likely to shape how far this tokenized trading activity becomes established in the United States.

The full thesis is laid out in Citrini Research’s published report.

Source: [Cryptopolitanhttps://www.cryptopolitan.com/citrini-leaves-bitcoin-out-of-crypto-basket/)