Stack Articles

Why Compute Is the New Scarce Digital Asset

An irreconcilable tension is brewing amid the Artificial Intelligence boom. The paths of demand and supply of compute—the processing power and computation resources needed to train, run, and operate AI models—are diverging. That imbalance, in our view, is creating attractive investment opportunities.

While digital demand for AI services can scale instantly, the physical infrastructure on which AI applications run (e.g., electricity, data centers, chips, memory, and cloud services) can take years permit, connect, and build (see Investing for the Compute Bottleneck). In our view, this dichotomy will grow over time due to two primary reasons:

Demand for compute is set to scale massively with the proliferation of AI agents: These agents perform multi-step tasks and may use 5–50x more compute tokens than a typical chatbot interaction. More activity at the application layer can translate into more demand for the compute infrastructure beneath it (Exhibit 1).

Supply faces bottlenecks across the entire compute pipeline. Data centers are projected to account for roughly half of US electricity-demand growth through 2030, while connecting new projects to the grid can take more than five years.1 Even after power is secured, developers still need permits, specialized labor, electrical equipment, cooling systems, GPUs, high-bandwidth memory, and networking.

In this context, we believe that sustained value will accrue to owners of scarce compute capacity. These include power producers, data center operators, and AI cloud providers that can already turn electricity into computation.

Key Takeaway: AI demand can scale much faster than the physical infrastructure supporting it. We believe this imbalance will favor owners of energized compute capacity and create attractive growth-oriented investment opportunities.

Exhibit 1: More demand at the top of the AI tech stack can create more demand at the bottom of the stack

1. Source: IEA report on energy and AI. Lawrence Berkeley National Laboratory.

SEC’s “Innovation Exemption” Brings Tokenized Stocks to Life

Tokenized equity trading has been on the rise (Exhibit 1), demonstrating the value that blockchain-based infrastructure brings to capital markets. But most of the activity today takes place offshore using derivative-like “wrapper” assets. The SEC’s recent “Innovation Exemption” ruling will likely change that, as it aims to bring onchain trading of tokenized stocks to the regulated US financial system and to assets that offer holders full voting rights and dividends.

Specifically, the SEC’s order temporarily relaxes two types of registration requirements: (i) qualifying trading venues will not need to register as exchanges and (ii) qualifying liquidity providers will not need to register as dealers. The exemptions are intended to facilitate trading of tokenized securities in a manner consistent with US securities laws. For example, while most volume today is permissionless, a whitelisted address could swap a tokenized stock for stablecoins via a permissioned Uniswap pool.

The order includes many qualifying criteria and limitations. Transactions must take place on public blockchains, participants must be permissioned, and trading venues must make public disclosures before any operations. All rules related to fraud and manipulation, AML/CFT compliance, and OFAC screening still apply. In addition, the order expires in five years, is limited to a certain number of listings, and has capped trading volume.

This is not the final form of tokenized securities markets, but a crucial first step to allow tokenized security markets to continue to mature. SEC Chairman Paul Atkins described the order as a “interim measure” that “must be followed by durable rulemaking.”

We expect that the Innovation Exemption will help tokenized equity markets develop further and demonstrate that blockchain-based trading infrastructure can be made fully compatible with compliance needs and investor protections. If successful, we expect it will be followed by a broadening of the scope—and hopefully bipartisan legislation by Congress—down the road.

Key Takeaway: The SEC’s Innovation Exemption will support the growth of tokenized equity markets and help demonstrate that blockchain-based trading infrastructure can be made fully compatible with compliance needs and investor protection.

Exhibit 1: Tokenized equity trading was already on the rise

Hyperliquid Coming Onshore via Kraken

Hyperliquid has become one of crypto’s largest derivatives venues without direct access to the US market (Exhibit 1). That may soon change. In August, President Donald Trump announced that CFTC Chair Michael Selig was working to bring Hyperliquid into the country legally.1

Since then, Payward, the parent company of the crypto exchange Kraken, has confirmed plans to offer US clients onchain perpetual futures through permissioned Hyperliquid HIP-3* markets.2 Subject to regulatory approval, Payward’s CFTC-regulated Bitnomial exchange and clearinghouse would create and administer the markets and clear and settle the contracts.3

Hyperliquid has a strong starting position. It averaged approximately $9 billion of open interest during the second quarter of 2026, an increase of 54% year-over-year. Hyperliquid was the only major perpetuals venue4 with any growth. It also supports 24/7 markets tied to equities and commodities. S&P Dow Jones Indices recently licensed the S&P 500 Index to Trade [XYZ] for a Hyperliquid perpetual market.5

For HYPE investors, the opportunity depends on fee-bearing volume. Hyperliquid directs nearly all revenue from trading fees toward HYPE token purchases. In our view, a US venue could strengthen this flywheel if it runs on Hyperliquid infrastructure and pays protocol fees.

Key Takeaway: A regulated US path could expand Hyperliquid’s market, validate its infrastructure, increase fee revenue, and potentially bolster the value of HYPE, the protocol’s native token

Exhibit 1: Hyperliquid has gained market share from the largest centralized exchanges

White House, “President Trump Delivers Remarks, Aug. 19, 2026,” August 19, 2026.

The preliminary HIP-3* (Star) markets which are live on testnet could provide controls for regulated access. A deployer can create a venue with an onchain wallet allowlist. The deployer can also delegate access management and limited account actions.⁵ These tools do not provide regulatory approval. However, they could let a regulated operator control access while using Hyperliquid’s matching and margin infrastructure.

Payward, “Payward Intends to Bring Onchain Perpetual Futures to US Clients, Starting on Hyperliquid,” September 16, 2026.

Major perpetuals venue defined as top 5 in perpetuals volume or open interest based on data from Coingecko as of September 16, 2026.

S&P Global, “S&P Dow Jones Indices Licenses S&P 500 to Trade[XYZ] for Perpetual Contracts on Hyperliquid,” March 18, 2026

Fed’s Mid-Cycle Adjustment Unlikely to Bother Crypto Markets

The Federal Reserve’s 25 basis-point hike in the benchmark interest rate on Wednesday to 3.75-4.00% is unlikely to drive major changes in crypto markets, in our view. Why? Because we interpret yesterday’s move as a mid-cycle adjustment, not a cyclical swing in official policy.

In March 2022, the Fed embarked on a cyclical change in monetary policy to contain inflation, raising the fed funds rates by 550 basis points by July 2023. This move probably weighed on the price of Bitcoin and other digital assets during the last bear market because it meaningfully affected the opportunity cost of holding non-interest-bearing assets like Bitcoin.

But that’s not what happened on Wednesday. We believe yesterday’s move was a mid-cycle adjustment, not a cyclical change. And we doubt the one or two rate hikes expected for 2026 will lead to much change in capital allocation. The Greenspan Fed did an analogous one-off hike in March 1997, and the Nasdaq bull market kept rolling on (Exhibit 1).

There could be a bigger impact on specific pockets of the digital asset ecosystem. For example, stablecoin issuers like Circle and Tether earn higher revenues when cash interest rates move up. Higher rates on tokenized bonds and money market funds could also drive flows in onchain capital. Crypto is diverse, and higher rates affect certain assets differently than others, just like in traditional finance.

Key Takeaway: The Fed 25-basis-point rate hike on Wednesday—and a potential second hike still this year—are unlikely to drive major shifts in digital asset markets, in our view.

Exhibit 1: The Fed’s mid-cycle rate adjustment in 1997 had little bearing on markets

Can Bitcoin Improve Private Market Portfolios?

Private markets have become a common piece of institutional portfolios, offering access to return sources beyond public stocks and bonds. There is, however, oftentimes a common set of risks. Private equity, venture capital, real estate, and private debt can all remain sensitive to the same underlying forces—including economic growth, financing costs, liquidity, and public-market valuations.

Bitcoin offers exposure to a fundamentally different return engine. Although, of course, still sensitive to fluctuations inherent to market cycles, Bitcoin’s investment thesis centers on fixed supply, global accessibility, liquidity, and growing demand for digitally native scarcity. Also, as shown in Exhibit 1, it has a low correlation to private markets, paving the way for true diversification of risks across private market portfolios.

In fact, even a modest allocation can have a meaningful effect. Exhibit 1 illustrates how adding Bitcoin increased the Sharpe ratio of a private market portfolio historically, as the digital currency’s differentiated returns and low correlation to private assets more than offset its higher standalone volatility.

From this perspective, we see Bitcoin working as an optimizing, complementary asset in a private market portfolio, with private assets providing access to long-duration ownership and illiquidity premia, and Bitcoin offering liquid exposure to digital scarcity.

Key Takeaway: Bitcoin can help optimize private market portfolios. Even at very modest allocations, the digital currency enhanced risk-adjusted returns historically, improving the overall portfolio’s Sharpe ratio by pairing long-term private ownership with liquid, digital scarcity.

Exhibit 1: Bitcoin allocations have benefited private market portfolios historically

Zcash Mining Is Taking Off

Zcash is a Bitcoin-like digital currency with additional privacy features. Both networks are secured by proof-of-work (PoW) mining, in which specialized computers solve computation challenges to earn rewards and update the blockchain. Due to strong token price performance, Zcash mining has become highly profitable, which in turn encourages more mining activity and reinforces network security.

The specific details differ, but both Zcash and Bitcoin PoW mining use the same basic structure: miners compete to solve a specific challenge, they produce hashes and compare the result to a target, and the target adjusts to maintain a roughly steady block time.1 The Bitcoin network is much larger and offers a higher aggregate miner reward: approximately $35 million per day versus roughly $2 million per day for Zcash.

However, Zcash mining is more profitable for an individual miner. We estimate that Zcash miner rewards are ~2x higher than Bitcoin rewards per mining rig per day, and ~4x higher per megawatt hour (MWh), although the machines themselves are not interoperable.2 Other sources suggest Zcash mining is currently more profitable per MWh than certain AI/high-performance computing (HPC) cloud services.3

More profitable mining encourages more mining activity. Using a standard measure of Zcash mining power, total activity has risen more than 2.5x this year (Exhibit 1). In a virtuous circle, higher token prices drive higher mining activity, which increases network security, and that may help sustain higher prices.

Key Takeaway: At current valuations, Zcash mining can be highly profitable. This is encouraging more mining activity which in turn supports network security.

Exhibit 1: Zcash mining activity is up ~2.5x this year

Key differences include the computational challenge, developer rewards, block times, and the cadence of difficulty adjustments.

Source: Grayscale Investments using data from Coin Metrics, whattomine.com, and Bitmain. Assumes electricity price of $0.05 per kWh, full uptime, and zero transaction fees. Bitcoin mining rig is Bitmain S23 Hydro and Zcash mining rig is Bitmain Z15 Pro. Calculations do not include pool fees, cooling and other operating costs, or equipment costs/depreciation. Data as of September 9, 2026.

Source: Miner Weekly

Crypto Regulation Becoming Clearer Even Without CLARITY

The CLARITY Act, bipartisan legislation that would establish a comprehensive rulebook for crypto markets, faces a key Senate test on September 15: a cloture vote on whether to begin floor debate. The vote requires 60 senators to pass. Republicans currently hold 53 seats, so support from Democrats is needed for advancing the bill.

Prediction markets imply low probability of enactment in 2026, reflecting policy disagreements and a compressed legislative calendar. A failed cloture vote would narrow the path to passage this year, although lawmakers could revisit the bill during the lame-duck session or in a future Congress.

That said, CLARITY is no longer the only source of regulatory direction. The US framework is becoming clearer across stablecoins, token issuance, tokenized securities, and perpetual futures even without the CLARITY Act (Exhibit 1).

The GENIUS Act has already established a federal framework for payment stablecoins. The SEC’s proposed Regulation Crypto Assets would create clearer pathways for token fundraising, while a potential innovation exemption could enable certain securities-market activities to move onchain. Proposed transfer-agent rules would further support tokenization by allowing the blockchain to serve as an issuer’s official ownership record. The CFTC has also opened regulated US pathways for perpetual futures through Kalshi and Coinbase, potentially creating a route for products linked to platforms such as Hyperliquid.

CLARITY remains important because only Congress can establish a comprehensive and durable division of SEC and CFTC authority. But failure in 2026 would not stop regulatory progress already underway.

Key Takeaway: CLARITY would provide the most comprehensive framework for US crypto markets, but its passage is not determinative—crypto policy is already advancing and providing better clarity on several other fronts.

Exhibit 1: U.S. Crypto Regulation Has Advanced—and Continues to Advance—Beyond the CLARITY Act

Risk Management and Income with Zcash Options

As Bitcoin has matured, its volatility has declined. Early in its history, Bitcoin’s price had a realized annualized volatility of about 125%.1 Over the last year, its price volatility has averaged only about 40%—comparable to the so-called “magnificent 7” large cap tech stocks.2

In contrast, Zcash has a much lower market cap (just 1% of Bitcoin’s) and a higher price volatility.3 Over the last year, Zcash (ZEC) price volatility has averaged about 140% (Exhibit 1).

For high-volatility assets, options are an especially useful tool for risk management and for pursuing alternative income. For example, at current volatility, the premium income from a hypothetical Zcash covered call strategy would equate to an implied yield of 70%.4 In contrast, Bitcoin covered call strategies currently offer an annualized yield of about 30%.

The higher potential yield comes with higher risk, and covered call strategies experience capital losses if spot prices decline by an amount greater than the premium received. Investors seeking defined outcomes can consider long call and put option structures.

Key Takeaway: Zcash has a lower market cap and higher price volatility than Bitcoin, making options a compelling tool for risk management and potentially an attractive path for investors seeking premium income.

Exhibit 1: Zcash is 3-4x more volatile than Bitcoin

Source: Coin Metrics, Grayscale Investments. Based on data from July 2010 through July 2015.

Source: Coin Metrics, Bloomberg, Grayscale Investments. Data as of September 3, 2026. Past performance not indicative of future results. The so-called “Magnificent 7” tech stocks had an average realized volatility of 38% over the last 1yr.

Source: Artemis. Data as of September 3, 2026.

The hypothetical strategies sell 3m ATM call options where implied volatility equals 100% for Zcash and 40% for Bitcoin. In this example, Bitcoin and Zcash are exchange-listed tokens as represented by the Coin Metrics composite price.

Tokenized Equities Have Found Liquidity; Financial Utility is Next

Tokenized equity trading reached new highs in August, with weekly spot volume peaking near $3 billion early in the month.1 Robinhood Chain, BNB Chain, and Solana were the leading networks for tokenized equity trading last week, together accounting for the majority of total volume.

But trading activity has outpaced onchain financial utility. Only about 5% of the tokenized equity market is currently deployed in onchain finance, suggesting that investors currently value continuous trading and global access more than employing tokenized stocks for lending, collateral, and other financial uses. Still, utility is emerging: tokenized equities in lending protocols such as Kamino and Jupiter have grown about tenfold over the past year.

Regulatory clarity could support the next phase. US regulators have discussed an innovation exemption with safeguards (e.g., verified participants and compliance-enabled token standards)2 and noted that tokenization could make securities easier to use as collateral.3 Regulatory changes could also let the equity and payment settle in one transaction, reducing the risk that either party fails to deliver.4 Together, these changes could broaden what tokenized stocks offer, helping them evolve from trading products into productive onchain assets.

Key Takeaway: Tokenized equities are scaling first as a global trading product. A growing capital base and possible US regulatory experimentation could support their transition from access to financial utility.

Exhibit 1: Onchain use of tokenized equities is small but growing quickly

All onchain data from Allium, Grayscale Investments. Data as of August 31, 2026.

Paul S. Atkins, “American Leadership in the Digital Finance Revolution,” US Securities and Exchange Commission, July 31, 2025.

Hester M. Peirce, “Enchanting, but Not Magical: A Statement on the Tokenization of Securities,” US Securities and Exchange Commission, July 9, 2025.

SEC Investor Advisory Committee, “Recommendation Regarding the Tokenization of Equity Securities,” March 12, 2026, p. 3.

Digital Assets Can Help Diversify Equity Concentration Risk

US household portfolios are more concentrated in stocks than at any point in history, with corporate equities now representing roughly 46% of household financial assets.1 Equity price-to-earnings ratios are also at historical extremes, and there is a lot of optimism baked in: consensus long-term earnings growth estimates for the S&P 500 have historically clustered around 10% to 15%, but have recently risen above 25%.2 Strong AI build out could support today’s valuations, but the market’s margin for disappointment has narrowed.

Crypto presents a contrasting setup. After a prolonged bear market in digital assets reset valuations, leverage, and investor positioning, the asset class may be entering a recovery from a much lower starting point. While US public equity markets will require unusually strong top-line growth and/or margin expansion to support elevated prices, crypto offers exposure to an emerging cycle with many improving fundamentals and comparatively depressed valuations. The opportunity is not to replace equities, but to consider diversifying away from an increasingly crowded trade at an attractive point in crypto’s market cycle.

Key Takeaway: With household equity exposure at record highs and stock valuations pricing in exceptional growth, crypto’s post-bear-market reset may offer a differentiated opportunity with an attractive entry point.

Exhibit 1: Household equity exposure makes record highs

FRED, Households and Nonprofit Organizations; Directly and Indirectly Held Corporate Equities as a Percentage of Financial Assets. Data as of June 11, 2026.

Source: Yardeni Research. Data as of August 28, 2026.