What sounded like science fiction at the DigiAssets 2024 conference is rapidly becoming reality in 2025. The convergence of blockchain, artificial intelligence, and the Internet of Things (IoT) is creating autonomous blockchain systems that operate with minimal human intervention, fundamentally reshaping how institutions approach digital asset investments.

The transformation is measurable and dramatic.

AI-related activity on blockchains has surged 86% since the start of 2025. Approximately 4.5 million daily unique active wallets are now engaging with AI-powered decentralized applications. 

According to a report by EY (PDF), institutional investors are responding with unprecedented capital flows. Specifically, 86% now have exposure to digital assets, with 59% planning to allocate over 5% of their assets under management to cryptocurrencies.

Here, we’ll explore what the autonomous blockchain systems mean for the future of institutional investment.

Beyond Blockchain: Harnessing "The Innovation Stack

DigiAssets 2024 featured the most innovative thought leadership on blockchain from institutional investors. Of particular note was a panel session entitled, "Going Boldly: Where to Find the Biggest Opportunities in Digital Assets & How to Seize Them, which featured insights from four practitioners on how institutions can take advantage of the moment.

James Diorio, CEO of Tradecraft Capital, articulated the fundamental shift in the discussion: "Bitcoin is now being looked at as digital gold... That's a wealth preservation asset, and you're going to have growth with that, but it's not going to be the same type of growth you get from an innovation stack.

Technologies Driving Autonomous Systems

Diorio's comment distinguishes between two distinct sets of opportunities. While Bitcoin serves as a store of value, the real innovation lies in what he calls the "innovation stack. This refers to technologies that will drive the next wave of autonomous systems.

This convergence creates what Diorio terms the "age of autonomy. IoT devices generate sensor data at unprecedented rates, AI transforms that data into actionable knowledge, and robotics enables physical execution.

When blockchain is added to this suite, it provides the capital transaction rails necessary for autonomous operations at machine speed.

From Self-Driving Cars to Self-Driving Businesses

Fundamentally, what is occurring is a progression from automated systems to fully autonomous entities. The concept of "agentic AI, autonomous AI agents capable of performing tasks, is a perfect example of this.

These changes have broad implications for adjacent industries, such as manufacturing, IT, customer services, and healthcare. However, the rise of autonomous entities is not something that institutional investors should ignore.

The Self-Driving Business

Diorio described the evolution: "Robotics gave us the self-driving car. Now, when you add blockchain to capital transactions, you can bring capital activity up to the speed of these other technologies. We’ve moved from self-driving cars to self-driving businesses.

Recent developments validate this idea. Interoperable blockchain networks enable seamless machine-to-machine transactions across different protocols, with projects like Zeus Network facilitating bridgeless architecture between Bitcoin and Solana ecosystems, according to a report by Bitcoinist. 

Enterprise Blockchain Goes Mainstream

Meanwhile, enterprise blockchain adoption reached nearly 90% among major corporations in 2024, according to a report by CoinTelegraph. This adoption is being driven by the need for secure, automated processes and an incentive to tap into decentralized financial networks.

The practical applications are already emerging.

Platforms, devices, and even robots equipped with blockchain capabilities can already perform a wide variety of tasks. They can automatically verify component authenticity, execute smart contracts with suppliers, and process payments without human oversight. 

In the insurance sector, IoT sensors monitoring agricultural conditions automatically trigger parametric insurance payouts when predetermined weather thresholds are exceeded.

"For instance, if a hurricane exceeds a specific wind speed, if rainfall drops below a critical level, or if an earthquake reaches a certain magnitude, the insurance automatically pays out without requiring a claims assessment, says a report on parametric insurance by AgTechNavigator.

These concepts can be applied to other sectors to achieve faster payments, more transparency, and a higher level of predictability for investors.

Market Structure Evolution and Institutional Readiness

It should come as no surprise that beyond improvements to efficiency and transparency, the convergence of blockchain, AI, and IoT presents unique investment opportunities for institutions. Digital assets are merely a starting point.

Traditional venture capital investments are typically locked up for years while projects grow and reach profitability. It can be difficult for investors to exit. This doesn’t have to be the case thanks to digital assets.

The Liquid Venture Model

"What is on offer with liquid digital assets is an opportunity to reap the benefits, to enjoy top quartile venture capital returns, in a liquid format, said Tony Fenner-Leitão, President of Cambrian Asset Management, during the panel.

"We think of tokens as very early-stage investments, not unlike investing in pre-seed and seed opportunities. The dramatic difference is that they are already very liquid.

This "liquid venture model represents a fundamental change in how institutions can participate in early-stage technology investments. Blockchain-based investments allow for dynamic portfolio management.

"The fantastic thing about digital assets is that you can change your mind along the way, Fenner-Leitão noted.

Three Categories of Innovation Opportunity

Felix Hartmann, Managing Partner of Hartmann Capital, provided a practical framework for understanding the current landscape and the infrastructure that supports it, which he calls "the innovation stack.

Hartmann identified three distinct categories, each with different risk-return profiles and institutional appeal:

• Blockchain Scaling Infrastructure: This includes Layer 1 and Layer 2 solutions like Solana, Ethereum, and Arbitrum that provide the foundational infrastructure for autonomous systems.
• Special Purpose Applications: These range from DeFi protocols to decentralized physical infrastructure networks (DePIN) and real-world asset tokenization—areas where blockchain enables new business models.
• Cultural and Momentum Assets: While often dismissed as speculative, meme coins represent a $10+ billion market reflecting generational cultural shifts and momentum-based investing strategies.

Importantly, the infrastructure supporting the innovation stack is rapidly maturing. Web3 infrastructure growth is being driven by institutional demand for compliant, scalable solutions.

For example, crypto ETFs reached $136 billion in assets under management in 2025, according to a report by AInvest. There is an appetite for autonomy and innovation, but institutions must master these three categories if they are to excel in this area.

Using a Stable Market Structure as a Competitive Advantage

Just as improved market structure democratized access to technology investments, similar improvements in digital asset infrastructure are creating institutional-grade investment opportunities. These opportunities will be critical in supporting autonomous systems projects.

Traditional Finance Leaders Are Entering the Industry

During the panel, Andrew Baehr, Head of Product at CoinDesk Indices, drew parallels to the technology sector's evolution in the 1990s:

"This reminds me of the technology and equities sectors in the nineties, when there was uneven liquidity and the market structure was pretty untrustworthy. Trades involved several people, from researchers to salespeople, to portfolio managers.

However, the market structure is maturing.

"Digital assets started as a hobby or a personal mission for many, but we now have blockchain technology along with digital assets as incentives for using blockchain, said Baehr. "The good news is that many smart, experienced people from traditional finance have joined the industry, bringing their skills and lessons from past crises to help build it better.

Regulatory and Fiduciary Standards Are Gaining Clarity

The regulatory environment is also evolving to support institutional participation. Enhanced scalability and interoperability among DeFi protocols are enabling seamless cross-chain transactions, while regulatory clarity is emerging as the primary catalyst for growth.

Fenner-Leitão highlighted another critical industry maturation trend:

"The active management side of digital assets hasn’t always put investors first, and that’s kept many institutions away. If the industry raises its standards and truly embraces fiduciary responsibility, it will attract more participants and unlock new opportunities.

This institutional-grade approach to digital asset management is becoming a competitive differentiator. As the industry moves beyond its early speculative phase, managers who prioritize fiduciary responsibility and proper risk management are positioning themselves to capture institutional capital flows.

"I believe this shift alone could make a big difference in how much the industry grows and the returns investors see, said Fenner-Leitão.

Real-World Implementation is Accelerating

The convergence of blockchain, AI, and IoT is no longer theoretical. It is already becoming a practical reality across industries like the following:

• Manufacturing: Robots equipped with blockchain identity chips can store crypto wallets, execute smart contracts, and make autonomous payments to suppliers based on production requirements
• Insurance: Parametric insurance products automatically execute payouts based on IoT sensor data, eliminating claims processing delays
• Supply Chain: Blockchain-enabled tracking combined with AI analysis provides real-time supply chain optimization and autonomous reordering

This creates multiple investment vectors for sophisticated institutions:

• Direct Protocol Investment: Investing in the fundamental blockchain infrastructure that enables autonomous systems, particularly interoperable networks that facilitate cross-chain functionality.
• Tokenized Infrastructure: Participating in decentralized physical infrastructure networks (DePIN) that combine IoT devices with blockchain-based reward mechanisms.
• AI-Blockchain Hybrid Projects: Targeting the 86% growth in AI blockchain activity through investments in projects that specifically combine artificial intelligence with distributed ledger technology.

The key is understanding that this isn't just about technology adoption—it's about participating in the fundamental rewiring of how value is created and exchanged in an increasingly autonomous world.

Looking Forward to the "Exponential Age

As Diorio noted, citing partner Raoul Pal's framework, we're entering an "exponential age where artificial intelligence capabilities will expand from the current 100 IQ levels to potentially 1,000-10,000 IQ over the next six years.

"Humans can't keep up with that, he said. "Autonomous systems are going to be the key element in how this world is going to work.

For institutional investors, this presents both an opportunity and an imperative. Those who position themselves at the intersection of blockchain, AI, and IoT today are not just investing in technology. They’re also investing in the infrastructure of tomorrow's autonomous economy.

The question for institutions is how quickly they can build the capabilities they need to capitalize on this trend, which could be the most significant technological convergence since the creation of the internet itself.

To learn more, don't miss the next Digital Assets US conference. It's happening from October 20-21st, 2025 at the JW Marriott Miami.