Feb 2026 Recap: The Repricing Phase

February felt like a structural inflection point, not just another month of rapid AI growth. The sharp sell off in tech stocks during the first week was not about earnings or the macro environment. It was markets reacting to a deeper realization: AI is not enhancing SaaS. It is compressing its margins, weakening its moats, and forcing a rethink of how value is created and captured.

AI isn’t just a productivity layer bolted onto software companies and financial institutions. It is becoming embedded intelligence inside the core operating stack across underwriting, workflows, capital routing, portfolio construction, and customer servicing. These functions are increasingly machine augmented and in some cases fully machine executed.

When intelligence becomes infrastructure, software and financial services reprice. Cost structures compress, decision velocity increases, and smaller teams can operate at institutional scale without linear headcount expansion. Growth starts to look different and it forces a rethink of moats.

The traditional switching cost moat built on workflow lock in and data captivity is weakening. If AI agents can replicate workflows across platforms and reduce integration friction, switching becomes easier and faster.

Investors should focus on businesses where value is anchored in distribution, network effects, brand trust, or regulatory positioning, not simply data entrenchment or per seat SaaS contracts. Infrastructure shifts reward structural advantages, not incremental ones.

This is already visible inside operating companies.

When Block CEO Jack Dorsey reduced nearly half of the workforce while stating the business remains strong, the signal was structural. Intelligence tools have changed what it means to build and run a company, and that change is accelerating each month.

AI increases output per person, reduces coordination drag, collapses layers, and shifts value toward judgment, synthesis, capital allocation, product intuition, and creative taste. Companies are entering a phase where growth is driven less by expanding org charts and more by increasing capability density. This results in smaller teams, higher leverage, and faster iteration to drive much better outcomes. 

Management teams increasingly expect employees to evolve as roles evolve, or requalify as the work itself changes. Investors are watching metrics like revenue per employee as indicators of operating leverage. The benchmark is shifting.

This acceleration will continue into 2026 and beyond.

Labour markets do not disappear. They reorganize. AI technology replaces specific tasks while creating entirely new categories of work and roles. These include: AI native venture builders, agent orchestration designers, and financial systems architects.

The surface narrative is contraction, but the deeper reality is reallocation.

For employees, this may be the most asymmetric opportunity in years. AI dramatically increases individual leverage, which means a single person can create outsized impact. But that leverage is earned. It requires relentless learning, adapting faster than the role itself, and rethinking how you produce value.

For those positioned correctly, economic impact per human expands meaningfully. The question is not whether roles change, but whether you are compounding with the shift.

Capital formation is evolving alongside software and labour.

Corporate venture capital used to sit at the edge of the organization, funding pilots and generating strategic insight. What we are seeing now is more structural.

Consider Robinhood launching its private markets and IPO focused strategy through Robinhood Ventures Fund 1. This is not a classic CVC arm deploying balance sheet capital for adjacency. It is a publicly traded closed end vehicle giving retail investors exposure to pre-IPO companies such as Databricks, Ramp, and Stripe.

The structure tells the story:

• A diversified portfolio with a 20% cap per holding
• No performance carry and a 1% management fee to start
• A closed end format where market pricing versus NAV discipline plays out in real-time

This is not experimentation at the margins. It is a financial platform redesigning how it participates in private market value creation.

Instead of just facilitating trades, platforms are expanding into private market access, asset management economics, and capital infrastructure. If it works, this model could unlock liquidity before traditional IPOs and reshape how value moves from private to public markets.

There are risks. Closed end funds often trade below NAV and private valuations are opaque. Corporate capital is moving toward the centre of platform strategy and we will likely see even more experimentation in 2026, including tighter integration with venture studio models.

This month we published the Future of Finance: Institutional Realities and the Role of Ethereum report.

We did not want to produce another commentary reacting to volatility. We wanted to understand what is actually happening inside institutions. So we spoke directly with operators, executives, builders, and skeptics across financial services. We focused on operating environments, regulatory constraints, integration realities, and the real work required to move institutions forward.

We moved beyond narratives and into capability.

What became clear is straightforward. The industry understands what is changing, but it is far less prepared to execute. That execution gap is where the opportunity lies.

Ethereum represents programmable financial infrastructure. When AI capability is layered onto programmable rails, finance transitions from human driven workflows to machine coordinated systems. This includes embedded finance, intelligent capital routing and autonomous treasury management.

If you operate, allocate, or build in financial services, the question is not whether this stack matters. It is whether you are positioned to execute against it.

The full report is live here:
👉 www.highlinebeta.com/eth

February marked a repricing moment. The foundation is moving, and everything built on top of it will adjust. That adjustment will not just create volatility. It will create significant new economic opportunities.

Marcus