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.