Exclusive: Wall Street embraces crypto it once feared

Traditional financial firms are rapidly embracing crypto, marking a turning point for an industry that once viewed digital assets as a threat.Why it matters: A long-running rivalry between Wall Street and crypto is disappearing, with financial institutions racing to meet growing demand for digital assets from retail and institutional investors.What they're saying: "Nearly all traditional financial services companies are gonna offer crypto, bitcoin, ethereum to their customers," David Ripley, the co-CEO of cryptocurrency exchange Kraken, told Axios on Tuesday.Ripley called this "a big story of 2026." Banks and brokerages are responding to demand from retail investors, institutions and wealthy clients. The big picture: A collision of mega-trends — AI, stablecoins, tokenization and extended-hours trading — is pushing financial markets in the same direction. Investing is becoming more accessible to average Americans, with more assets available to trade and fewer limits on when they can trade them.Ripley said that the rise of stablecoins has shown investors are willing to own blockchain-based versions of traditional assets. He expects publicly traded stocks to be next."It's not going to end there. … The next most significant place where we see tokenized equity or tokenized assets will be public equities," Ripley said.Zoom out: Nasdaq CFO Sarah Youngwood tells Axios that U.S. markets are deep enough to absorb the coming wave of trillion-dollar IPOs without rewriting the rules — even as SpaceX, OpenAI and Anthropic line up to go public.The system is prepared for "both those very small companies" being created by AI and "those larger companies" that emerge from them, she said.Zoom in: SpaceX, expected to debut on the Nasdaq later this week, is aiming to raise about $75 billion, valuing it at $1.7 trillion. That would be the largest IPO ever.What to watch: Both executives described a future in which financial markets are more global, more digital and increasingly always-on. Nasdaq is pursuing extended-hours trading, while crypto markets already operate 24/7. Meanwhile, tokenization is expanding the types of assets investors can own: Kraken recently announced plans to offer tokenized IPO shares to retail investors. Ripley tells Axios the goal is greater "access," noting that many ordinary investors have been "entirely locked out" of some of the biggest wealth-creating companies until late in their growth cycles.

Traditional financial firms are rapidly embracing crypto, marking a turning point for an industry that once viewed digital assets as a threat.Why it matters: A long-running rivalry between Wall Street and crypto is disappearing, with financial institutions racing to meet growing demand for digital assets from retail and institutional investors.What they're saying: "Nearly all traditional…

Traditional financial firms are rapidly embracing crypto, marking a turning point for an industry that once viewed digital assets as a threat.Why it matters: A long-running rivalry between Wall Street and crypto is disappearing, with financial institutions racing to meet growing demand for digital assets from retail and institutional investors.What they're saying: "Nearly all traditional financial services companies are gonna offer crypto, bitcoin, ethereum to their customers," David Ripley, the co-CEO of cryptocurrency exchange Kraken, told Axios on Tuesday.Ripley called this "a big story of…