Interview with Vanessa Grellet
As digital assets move from the margins of finance into mainstream portfolios and financial infrastructure, investors face a rapidly evolving landscape of opportunities and risks. Vanessa Grellet, Co-Founder and Managing Partner of Arche Capital and author of Digital Assets and Crypto for Investors, shares her perspective on regulation, portfolio strategy, DeFi, stablecoins, tokenization, and the future of digital assets.
With experience spanning traditional finance, market infrastructure and blockchain, what have you learned about how financial markets are changing as digital assets move into the mainstream?
We are in the middle of a 20-year financial infrastructure transformation where a superior tech takes over the existing fragmented infrastructure. Instant settlement, a single source of truth, 24/7 trading and programmable transfer of collateral are answers to frictions that T+1, fragmented ledgers, and overnight repo still create.
In 2026, that is no longer a white paper or a POC. Institutions are prioritizing stablecoins, trading, custody and tokenization together. DTCC, Nasdaq and NYSE have moved from experiments toward production frameworks for tokenized securities. Financial services now understand that they need to leverage public blockchains and not create private chains. Large banks are building consortium rails for tokenized deposits rather than waiting for a single public chain to become the default wholesale system.
Stablecoins are the first use case that is fully regulated in the US and the rest will follow.
Crypto as an asset class is also becoming mainstream thanks to ETFs and will be a part of alts allocation in many portfolio and retirement accounts in the future.
Digital assets are becoming mainstream first as rails and cash equivalents, and also as a portfolio sleeve.
As digital assets become more widely accepted, what should investors understand before deciding whether they belong in a portfolio?
They should decide *why* they want exposure as part of their alts allocation.
Bitcoin is a scarce, globally transferable, non-sovereign asset with a simple monetary rule. That can serve as a diversifier or a hedge against monetary debasement for some investors. Most other tokens are closer to early-stage technology or network equity: high failure rates, weak cash-flow anchors, and governance that can change overnight. Crypto is not one asset class that moves evenly within that category.
Investors also need to accept three structural facts. Volatility is not a bug; drawdowns of 50–80% have happened more than once. History is short, so backtests and Sharpe ratios are fragile. And operational risk is real: custody, keys, exchange failure, smart-contract failure, and tax treatment can dominate price risk for the unprepared.
A useful test is whether a 70% decline would force you to sell other assets or abandon the plan. If yes, the allocation is too large, regardless of conviction. For most diversified investors, digital assets belong as a satellite sleeve with an explicit purpose, not as a substitute for equities, credit or cash.
How is clearer regulation changing the way banks, asset managers and other institutions approach digital assets?
Clarity did not create enthusiasm. It changed the compliance answer from “we cannot” to “we can, if we build the controls.”
In the United States, the GENIUS Act created a federal framework for payment stablecoins: reserves, redemption, supervision, and AML obligations. Banking agencies rolled back the posture that had chilled custody and related activity. Accounting and supervisory obstacles that kept banks off the field were removed or rewritten. Market-structure legislation—particularly the effort to draw a cleaner line between the SEC and CFTC—is still the missing piece, but the direction of travel is already visible.
Asset managers can distribute exposure through ETPs and, increasingly, tokenized funds. Banks can compete for custody, issuance of regulated digital money, and settlement services. Risk, audit and operations teams now have a rulebook they can implement, which is what large institutions actually need.
Regulation is also sorting the market. Speculative tokens remain in a higher-friction bucket. Stablecoins, tokenized government securities and tokenized deposits are being pulled into the existing prudential world. That is why institutions talk less about “getting into crypto” and more about which rails they will use for cash, collateral and settlement.
For investors looking to enter the space, what are the main ways to gain exposure, and how should they choose between them?
There are five practical doors, and they are not interchangeable.
- Regulated funds and ETPs. Best default for most investors. You get brokerage custody, familiar tax reporting, and no key management. You also accept fund structure, possible premium/discount issues, and a narrower universe than the on-chain market.
- Spot holdings at a regulated exchange or qualified custodian. Appropriate if you want direct ownership of Bitcoin or ether and can handle account security, withdrawals and tax lots.
- Public equities and DATasin the ecosystem. Exchanges, custodians, miners, payment firms, tokenization platforms and vehicles accumulating holdings in one token. This is equity risk with digital-asset sensitivity, not a substitute for holding the assets.
- Private funds that can be VC or liquid funds offering either directional exposure or delta neutral exposure.
- Yield strategies with DeFi, whether it’s staking, lending, or leveraging liquidity pools. Only for investors who understand slashing, smart-contract risk, and liquidity risk, and can interact directly onchain through wallets and blockchain infrastructure.
Choose by constraint, not by narrative. If you need simplicity and an adviser-friendly wrapper, use an ETP. If the thesis is monetary scarcity, hold Bitcoin directly or through a spot product. If the thesis is market-structure change, infrastructure equities and tokenized cash products may express it better than a basket of altcoins. Avoid mixing all five and calling it diversification.
Digital assets can be highly volatile. How can investors build a disciplined portfolio without trying to predict the next market cycle?
Start with a maximum allocation sized to withstand a severe drawdown. For many long-term investors, that is 1–5% of liquid assets; anything more is an active risk budget, not a strategic sleeve. Fund it through dollar-cost averaging or predetermined tranches so that purchase decisions are not made in the middle of a headline.
Use rebalancing bands rather than constant tinkering. If the sleeve grows beyond a ceiling, trim it. If it falls below a floor and the thesis remains unchanged, add to it. That mechanically sells strength and buys weakness without requiring a view on “the top.”
Keep the sleeve separate from spending money and near-term liabilities. Do not use leverage. Do not size a position so that a 60% decline would force a lifestyle change. Review the thesis and custody once or twice a year, not every candle. The discipline is accepting that you will look early, late, and foolish at times, and that the process is the product.
What do investors most often get wrong when they apply traditional investing principles to digital assets?
They assume a token is a stock because it has a ticker. Most tokens do not have residual claims on cash flow, enforceable minority rights, or a going-concern accounting identity. Valuation tools built for discounted cash flows or book value travel poorly to digital assets.
They assume that owning twenty coins is diversification. In stress, the complex often trades as one risk factor. Market-cap weighting also imports a different problem: liquidity is uneven, and many large names are still fragile networks rather than durable enterprises.
They apply “buy and hold forever” to assets that can go to zero through design failure, hack, or abandonment.
Beyond individual cryptocurrencies, which developments in stablecoins and tokenization could have the biggest impact on financial markets?
Stablecoins and tokenization matter because they change how money and assets move, not because they create a new speculative sector.
Regulated payment stablecoins are becoming treasury and settlement instruments: T+0 movement, 24/7 availability, and a dollar balance that can sit next to tokenized securities. Once that cash leg exists on-chain, tokenization stops being a demo. Tokenized Treasuries and money-market funds already dominate the real-world asset stack because they are simple, high-quality collateral. Tokenized deposits and bank consortia are the wholesale version of the same idea—commercial bank money with ledger mobility.
The market-structure effects to watch are collateral mobility, shorter settlement, and always-on trading of familiar instruments. If a Treasury token, a money-fund token and a regulated stablecoin can move and pledge with fewer intermediaries, repo, margin and cross-border payments get cheaper and faster. That is a bigger deal for markets than another layer-1 narrative.
Looking ahead, what changes do you expect will matter most as digital assets become more embedded in the financial system?
The next phase will be decided by plumbing, law and risk weights, but also by whether Bitcoin makes a new high for broader market sentiment and narrative and portfolio allocation.
Market-structure rules that settle jurisdiction and custody will determine how far public blockchains can sit inside regulated trading and issuance. Capital treatment will decide whether banks can hold and intermediate these assets economically. Interoperability between tokenized securities, tokenized deposits and stablecoins will decide whether we get one settlement fabric or a set of walled gardens.
For investors, digital assets are still in their infancy. The gold ETF did not invent gold; it made a scarce asset easy to own, and that wrapper pulled it into mainstream portfolios. Spot Bitcoin ETFs have done the same thing, only faster: IBIT reached tens of billions of dollars in a fraction of the time it took GLD, and the U.S. Bitcoin ETF complex is already approaching $100 billion. That is the on-ramp, not the destination. Gold’s ETF era still left years of adoption ahead. Bitcoin has only just entered the same channel.
Executive Profile
Vanessa Grellet is Co-Founder and Managing Partner of Arche Capital, a multi-strategy investment firm focused on digital assets and emerging technologies. A former New York Stock Exchange and ConsenSys executive, she has 20+ years of experience spanning traditional finance and crypto. She is also the author of Digital Assets and Crypto for Investors.
