July 31, 2025
5 min read
Meagen Seatter
Explore how blockchain and AI convergence is transforming investing, decentralization, and digital finance in 2025.
Smart Tech Revolution: How Blockchain and AI are Reshaping Investment
By Meagen Seatter Published Jul. 31, 2025 Two digital revolutions, blockchain and artificial intelligence (AI), are converging to create smarter ways to manage assets ranging from crypto to private equity. This merging of revolutionary technologies is reshaping the foundations of investing by accelerating decentralization, improving risk management, and opening new markets. Recent macroeconomic movements highlight the urgency of these shifts. Although the S&P 500 (INDEXSP:INX) recovered to record highs following an April plunge, its performance pales in comparison to Bitcoin’s gains. In Bitcoin terms, the S&P has lost 15% year-to-date and a staggering 99.98% since 2012, according to The Kobeissi Letter. Meanwhile, stablecoins have become lifelines for emerging markets, crossing a market cap of over US$160 billion in June, up from US$150 billion just weeks prior. At the same time, decentralized exchanges (DEXs) are capturing more market share, with Q2 2025 seeing a 25% spike in DEX volumes compared to a 28% drop in centralized exchange (CEX) trading, according to CoinGecko. AI-powered strategies are increasingly used in managing crypto treasuries and executing DeFi trades. Together, these shifts reflect a change in investor priorities toward agility, yield, and transparency in smart technology. As these trends accelerate, their practical implications are reshaping investment across diverse domains.Financing Infrastructure
New infrastructure is needed to power the next wave of AI innovation, and blockchain is providing novel ways to finance it. “What’s unfolding right now with AI in the U.S. is a full-blown industrial revolution, and it’s being backed and subsidized by the federal government like few things I’ve seen before,” Hive Digital Technologies (TSXV:HIVE, NASDAQ:HIVE) told the Investing News Network (INN). High-performance GPUs are the backbone of AI innovation but are scarce and expensive. For many investors, the only way to tap into this high-demand infrastructure’s price action is through stocks. Companies like Compute Labs address this by tokenizing illiquid assets such as GPUs via blockchain, offering direct access and ownership of the underlying hardware. The company anticipates managing over a billion dollars in assets within the next few years, all dedicated to owning and managing compute hardware that facilitates AI and other workflows. For AI developers, this model means access without giving up equity or ownership in their company. For investors, it offers a new way to gain exposure to digital infrastructure without owning stock. “We are not working with developers the same way that a cloud provider would,” Compute Labs co-founder Nikolay Filichkin told INN. “We give them the capital, or we give them the hardware they need to grow their businesses. That way, when a developer is working with a cloud service provider, they're working with one of our partners. So you can think of us as kind of like a financier for GPUs.” Filichkin says illiquid asset tokenization will provide investors access to opportunities across various asset classes that are typically difficult to access. “Our whole vision is to turn illiquid assets that are high-yielding or high-return into liquid assets. And we start with GPUs, because that's the narrative that makes sense, and it's really lucrative, it's really high returns,” he continued. “But beyond that, there's also CPUs, storage, and then we can get into the more heavy infrastructure that investors would have no ability to get into. And that could be fiber optic cables, solar, nuclear.” This broader vision for digital infrastructure financing extends to fundamental improvements in blockchain capabilities. Franklin Templeton-backed Bitlayer recently launched its BitVM smart contract bridge on mainnet. This solution allows Bitcoin holders to use smart contract platforms by converting Bitcoin to Peg-BTC (YBTC) via a trust-minimized bridge. It leverages Bitcoin's Taproot upgrade for better off-chain computation and privacy and has partnered with Sui, Base, and Arbitrum. This development expands Bitcoin’s utility, allowing it to participate more actively in smart contract ecosystems vital for financing and building digital infrastructure.Democratizing Trading
The rise of zero-day-to-expiry (0DTE) options offers new income strategies but navigating them is highly complex. To simplify access to these institutional-level yield strategies for retail investors, packaged trading products are emerging, offering robust income streams designed to perform consistently amid market uncertainty. IncomeShares yield-focused European exchange-traded products (ETPs) allow investors to gain exposure to single stocks, indices, and commodities without trading complex options themselves. Each IncomeShares product combines core holdings with an options overlay to generate yield. For example, their GLDI - Gold+ Income ETP pairs exposure to gold with a call selling strategy, transforming gold, which typically doesn't pay interest, into a monthly income stream. “We’re not targeting bond-like returns, we’re offering equity-linked income,” explained Leverage Shares CFA Oktay Kavrak. “Fixed income may offer 4-5% yields with low volatility. Our products, particularly those on volatile names like Coinbase (NASDAQ:COIN) or MicroStrategy (NASDAQ:MSTR), often generate double-digit annualized yield, but with equity exposure. “The goal is targeting options far enough from the current spot price to capture some upside while still delivering meaningful income. Think of it as the middle ground between dividend stocks and growth names.” Leverage Shares’ use of technology is crucial for managing the scale of their offerings. “A lot of the trading in the background is done automatically based on pre-programmed rules - which means our infrastructure can manage hundreds of ETPs and dozens of weekly option rollovers without constant manual intervention,” Kavrak added. “We have 19 IncomeShares ETPs – but our entire range under Leverage Shares has over 160 products across various currencies and exchanges. This kind of scale is simply not possible without the role of tech.”Optimizing Digital Asset Management
Evolving DeFi protocols, chains, and yield strategies, each with unique risks and technical needs, make managing crypto complex. Public companies benefit from operational frameworks that exceed manual oversight to navigate this volatile environment and meet transparency requirements. Machine learning helps firms make informed, real-time decisions in lending, liquidity, yield farming, and cross-chain arbitrage. Justin Kenna, CEO of GameSquare (CSE:GSQ), explained how the company uses Dialectic's Medici AI system to strategically manage its significant Ethereum investment by continuously monitoring a wide range of DeFi risk signals in real time to dynamically reallocate exposure and identify yield opportunities while keeping capital defensible. “The major difference between Medici and traditional active fund management is speed and granularity,” Kenna said. Medici operates with continuous, automated optimization, allowing them to move with the rhythm of the market in real time while maintaining a conservative, capital-preserving approach. “This strategy reflects a broader shift in how smart technology is reshaping investment. We see this as a TradFi-meets-DeFi model, where institutional capital, public-company governance, and on-chain opportunity can align in a way that is scalable and transparent. It’s still early, but we are building fast and believe this approach will help redefine the next generation of financial infrastructure.” AI and blockchain can also overcome traditional system inefficiencies and simplify access to private market assets, projected to exceed US$20 trillion by 2030. Anthropic’s partnership with financial service firms to provide AI-generated insights from market data through Claude showcases smart tech’s impact beyond DeFi, transforming traditional finance.The Institutional Shift
Stablecoins are now integral to the future of banking. On recent earnings calls, JPMorgan (NYSE:JPM), Citigroup (NYSE:C), and Bank of America (NYSE:BAC) confirmed they are actively exploring stablecoin infrastructure and tokenized deposit models. JPMorgan, a leader with JPM Coin, plans to be involved in both. Citigroup is examining a Citi-branded stablecoin, while Bank of America seeks low-volume, high-friction use cases. Meanwhile, Charles Schwab is launching spot trading for Bitcoin and Ethereum, and Cantor Fitzgerald is in talks to acquire over US$3.5 billion in Bitcoin. These moves, alongside growing corporate crypto treasuries, signal traditional finance's readiness for mainstream programmable finance.The Convergence Era
The convergence of AI and blockchain is birthing a new investment paradigm characterized by unprecedented speed, customization, and inclusivity. These cutting-edge technologies are reshaping how capital is formed, deployed, and secured across the global economy. The US Treasury’s pivot to proactive, growth-oriented financial regulation may open doors for blockchain-based asset structures if they demonstrate compliance and consumer safety using AI and smart contracts. Policy shifts like the Genius Act and proposed executive orders on crypto in 401(k)s signal a deeper layer of integration and a robust institutional appetite for digital assets despite lingering uncertainties. Looking ahead, the landscape will be shaped by whether fintech firms succeed in lobbying against restrictive bank fees for data access, potentially accelerating capital shifts toward decentralized finance. Further changes are anticipated as Ethereum-based lending protocols gain favor over centralized alternatives, possibly triggering a new altcoin season and driving stock rallies for companies adopting altcoin treasury strategies. Don't forget to follow us @INN_Technology for real-time news updates!Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article. Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed do not constitute investment advice. Readers are encouraged to perform their own due diligence.
Source: Investing News Network