Why Crypto Changed Forever | Roundup

The primary mode of interaction with crypto has fundamentally shifted. Crypto is now largely invisible on the back end of regular company products rather than users directly onboarding to protocols or buying tokens as they did five years ago. Miles sees far fewer investable token opportunities today and notes a disconnect between private investors with equity exposure and public market participants holding only tokens that have trended down in price.

Regulation made it easier for players to move up and down the stack. Coinbase and Binance both transitioned from owning the end user to launching their own chains in Base and BNB Chain respectively. Hyperliquid started as an app on Arbitrum, outperformed Binance, and then became its own chain, illustrating that finding users and achieving product-market fit is genuinely difficult while building a blockchain is no longer technically hard, especially in the AI era. Blockspace is now a commodity. Ethereum gas fees averaged roughly 50 dollars in 2021 and have since fallen below one dollar, with transaction volume needing to increase approximately 50 times to recover lost fee revenue, and general-purpose L2s are described as overbuilt.

Mike argues this is probably the best single moment for second-mover advantage across all of crypto. Large incumbents like Fidelity, BlackRock, and NYSE avoided the space for five to seven years due to regulatory risk, giving startups room to build defensible positions. That window is now closing as the US regulatory environment has de-risked the industry, but incumbents carry hangovers from wrong operating structures, legal setups, and cap tables built during the unclear regulatory period. Defensibility is described as mattering significantly more now than 12 months ago, and the industry is still working out what defensibility means even for existing protocols.

Stablecoin issuance itself is commoditizing, shifting value capture toward applications that control order flow such as Hyperliquid and Morpho. Large fintech companies like Robinhood and Stripe have enough leverage to demand 80 to 90 percent of yield from issuers like Circle rather than building their own stablecoins. The network effects of USDC and Tether are described as underestimated by the market. USDC is expected to benefit from regulatory compliance properties that previously constrained its growth, while Tether's strength is attributed to its focus on core network effects. Circle is criticized for repeatedly launching products that attract little usage instead of concentrating on what it does well. RWA trading pairs default to USDC specifically because it is US-regulated, a context where Tether cannot be used. Base is described as underrated for the next cycle given Coinbase's user relationships, execution layer, and application ecosystem.

Ethereum and Solana are described as strong long-term buys because they function as neutral settlement layers where economic activity drives fees, making them unusual assets where yield and price can rise simultaneously. Consortium arrangements among large players like BlackRock and Stripe are seen as at risk of breaking apart due to misaligned incentives, and if they do, assets are predicted to settle on neutral parties like Ethereum and Solana that have been building credibility for ten to twenty years. Vitalik's statements suggesting Ethereum does not need to generate fees and should resemble Linux are described as making ETH harder to own as an asset, while Anatoly's public emphasis on neutrality and fee generation makes Solana more attractive to hold. Despite current negative sentiment, the accumulated state, assets, liquidity, wallets, and surrounding infrastructure built on Ethereum over many years without a critical failure is described as genuinely underrated.

Founders who launch tokens effectively have two products and must actively manage both the business and the token price. Projects winning large contracts are distributing substantial token incentives without adequate disclosure, causing market capitalization to rise while price falls. The infrastructure powering crypto currently works against token price appreciation. One speaker advocates that founders disclose token incentives paid out to third parties while acknowledging uncertainty about the right tradeoff.

The broader view is that crypto is going through a classic boom-bust infrastructure consolidation, that approximately 10 percent of crypto experiments produced world-changing outcomes while roughly 90 percent failed, and that the customer base has fundamentally changed now that regulated financial players are permitted to participate. One speaker estimates crypto is approximately 50 percent of the way toward delivering on its promise of access and opportunity, and predicts success if on-chain businesses can launch tokenized representations of themselves at earlier stages than traditional public markets allow. The cost of issuing tokenized equity is described as an order of magnitude lower than a traditional IPO, and Coinbase is expected to compete in that market.