DeFi Is Having Its Cable Moment
Why most Web3 companies won’t survive the TradFi takeover (and how the smart ones will)
The Thesis: Time Is a Flat Circle
Web3 is at an inflection point. Every industry has periods of hyper growth, awareness, consolidation, and drawdowns. The Web3 space is going to be no different.
Here’s what’s coming: DeFi is going to look like cable.
And just like cable, most of the companies you know today won’t survive the consolidation. But the infrastructure being built right now will power the future of finance, just not in the way most envision.
The Cable Playbook: How Disruption Becomes Consolidation
In the late 90s and early 2000s, dozens of cable companies competed for consumers. Different packages, different value propositions, different prices. Then consolidation happened. Eventually, you had maybe four or five companies Comcast, BellSouth, DirectTV, controlling everything.
The result was predictable: Prices skyrocketed. Value dropped. Competition disappeared, and with it, any reason to innovate.
At the same time, streaming emerged. Netflix, Apple TV, and HBO Max offered à la carte viewing. As high-speed internet spread, people cut the cord. Streaming took over the world as 83% of US adults now watch streaming content.
But now streaming is reaching its own inflection point. Costs are up. Ads are everywhere. Content quality is declining. Companies are consolidating Netflix is bidding for HBO and Warner Brothers.
We’re back where we started: A handful of large companies providing the same service with the same content, the same ads, and very little differentiation.
Time is a flat circle.
DeFi’s Cable Moment: What’s Actually Happening
Crypto and Web3 have seen exponential shifts from people using on-chain tools to buy drugs, to BlackRock, Visa, Mastercard, and dozens of others tokenizing real-world assets and using crypto infrastructure for settlements.
Here’s the hard truth: The Web3 space as we know it is going to shrink and shift significantly. DeFi is going to shrink, and TradFi is going to take over.
They’ll bring their money and their users. But they’re going to use the infrastructure that’s been laid down over the past two decades by crypto natives. Many Web3 companies won’t exist in 10 years. They’re going the way of Blockbuster, unable to innovate, unable to deliver what users need.
Why? Because there is no “Onboarding the masses to DeFi.” That fantasy is dead.
TradFi is going to make crypto infrastructure more usable and accessible to the rest of the world without bringing everyone into decentralized finance. They’re not coming to DeFi. DeFi’s infrastructure is going to TradFi.
The Four Routes: Who Survives and Who Dies
Web3 companies will take one of four routes:
Route 1: Go Out of Business — Couldn’t find product-market fit. Built for a world that isn’t coming.
Route 2: Get Acquired — Absorbed by TradFi companies or successful Web3 companies, consolidating the space.
Route 3: Innovate or Die — Pivot and find new product-market fit in the TradFi-dominated future.
Route 4: Become Infrastructure — Make themselves crucial to what TradFi is building. These are the survivors, the ones TradFi can’t build without.
The Takeover Is Already Happening
This isn’t theoretical. The TradFi integration is already here.
Major Banks Building Crypto Infrastructure:
- JPMorgan Chase launched its own blockchain and JPM Coin for institutional payments. They’re tokenizing money market funds and partnering with regulated crypto firms.
- Goldman Sachs revived its crypto trading desk, offers Bitcoin futures, and partnered with BNY Mellon to launch digital tokens.
- PNC launched direct Bitcoin access using Coinbase’s infrastructure.
Asset Managers Legitimizing Digital Assets:
- BlackRock and Fidelity are running successful Bitcoin ETFs and offering digital asset custody to institutional investors.
Payment Giants Making Crypto Invisible:
- Visa and Mastercard are working with Circle and Ondo Finance to integrate stablecoins into payment networks for more efficient settlements.
Infrastructure Providers:
- Anchorage Digital, Copper.co, Northern Trust provides institutional-grade custody.
- Circle facilitates faster transactions with traditional players.
- Ripple and Canton Network provide blockchain networks for TradFi to build on.
Retail Integration:
- BitPay handles compliance for Gucci, AMC, and AT&T.
- PayPal accepts 100+ cryptocurrencies, settling in fiat.
- Walmart piloted Bitcoin payments using Zero Hash infrastructure.
Government Integration:
- Coinbase is working with New York State on universal basic income pilots.
The Reality Check: They’re Not Coming to Us
Traditional Finance is not going to onboard millions to DeFi. TradFi is going to drag DeFi into their world.
We integrate with them, not the other way around.
TradFi realized what they’re doing isn’t efficient enough. But because they have the infrastructure, money, and power, they’re coming to us saying “we want to do a deal,” not “we need you desperately.”
This is a partnership of convenience, not desperation. And that means the attitude in Web3 needs to shift, which is already happening among industry leaders who see the writing on the wall.
The Survival Playbook
The companies that will survive are building in these areas:
Financial Infrastructure: Data platforms, machine learning & AI, payments settlement, digital banking, and wallets.
Core Web3 Value: Tokenization of real-world assets, speed and efficiency, interoperability, decentralized storage, privacy tech.
These are the tools TradFi needs but can’t build itself.
What the Future Actually Looks Like
It’s not crypto bros at coffee shops in Majorca trading NFTs or paying for Michelin dinners in shitcoins.
It’s this: Large institutions partner with DeFi companies so you can buy groceries, pay bills, and get tax returns in USDC and USDT. Settlements happen in seconds. Cross-border payments cost pennies. Your portfolio includes tokenized real estate and bonds that trade 24/7.
It’s going to look boring. It’s going to look like TradFi with better plumbing. And that’s exactly the point.
The Hard Pivot
There will always be a place for meme tokens and NFTs, but it’ll be niche, like baseball cards and collectibles.
It’s time to stop holding onto what DeFi is because “we were here first.” We need to work by, with, and through traditional finance instead of being apprehensive and non-innovative.
The infrastructure you’re building is valuable. The technology is revolutionary. But the market that’s coming isn’t the one you thought was coming.
Who Will Survive?
There will always be top-tier protocols, Ethereum, Solana, and Bitcoin. But it’s a toss-up for everyone else.
The question every Web3 founder should ask: Are we building something TradFi needs, or something crypto natives want?
In five years, only one of those groups will have the capital.
The companies that survive will be the ones building tools TradFi needs, infrastructure TradFi can’t replicate, and partnerships instead of fighting institutions.
Look at the list above, those companies saw this coming and positioned accordingly. They’re not waiting for TradFi to come to them. They’re already at the table.
DeFi is having its cable moment right now.
The question is: are you building Netflix, or are you Blockbuster?
What route is your company taking? Are you building for the Web3 world we have, or the TradFi-dominated world that’s coming?
Sign up here.
Follow the team
Follow our founder
Follow our writer
