Crypto Truths & Lies for the Year 2026
How will crypto perform in a changing world order?
The US stock market is currently in a ‘bubble’ territory, with the valuations seen during the Dot-com peak of 1999.
With P/E ratio at x40.5, it’s higher than the x32 before the 1929 crash.
And according to what Warren Buffett called “the best single measure of where valuations stand at any given moment” the ratio of total market cap to GDP now sits at 230%.
It’s 77% higher than the long-term trend. Before the 1929 crash the ratio stood at 130%.
Sure, this time might be different. Call it a debasement trade as USD loses purchasing power and the world needs to inflate the debts.
But it might be a ‘non-obvious lie’ that debasement trade is not real.
If that were true, the line in this chart would be flat.
If Money Supply doubles→ Stocks double →Ratio stays the same.
Instead, the line is vertical.
This shows that stock prices are pumping 28x faster than the rate of new money creation.
Or maybe AI is indeed transformational thus traditional metrics don’t apply.
Coupled with the macro uncertainty, inflation, wars increasing and, naturally, people are worried.
As Ollie wrote, people are living in “widespread economic anxiety.”
You don’t need to be a mage to know that for most people, the desire in this era is simply stability, ownership, and exposure to upside. We remain children of capitalism, and our desires; inherently capitalistic.
So, for most, the clearest answer to all of this is exposure to stocks and equities and predictably, another 12 months of Trump’s fist-pumping and vain boasting in his genius.
Naturally, fewer people are willing to degen trade altcoins with 100% of their portfolio right now.
But the outlook for BTC might be different.
I treat BTC as a risk-off asset: a hedge against macro uncertainty, crumbling international order, and fiat debasement (which might not be happening).
This is a non-obvious truth from 2025 that I shared in this blog post last year.
Too many still view BTC as risk-on, thinking it only pumps when the macro is stable and the NASDAQ rips.
This clash of narratives is exactly what’s suppressing the price. The fearful holders need to capitulate to the buyers who see BTC as digital gold.
My hope is that the ‘great rotation’ finalizes this year, and BTC solidifies its place as a safe haven.
But there’s a HUGE risk that stocks, and everything with it just crash down the cliff… and crypto with it.
Thus having this macro bubble in mind, I want to focus on mid-term trends that I believe will shape crypto in 2026.
And there’s no better place to start than distilling other truths & lies for the year 2026.
The first being that crypto is a prisoner of this macro bubble.
Like last year, this time I also follow the same mental framework initially proposed by Peter Thiel and adapted for crypto by Matti from Zee Prime Capital.
“If you listen to chatter and narratives these days what do you think is the obvious truth and what is obviously false? What is the non-obvious truth and what is non-obviously false?” - Matti.
Non-obvious truths and lies are harder to spot but reveal what might soon become clear to everyone. These offer the best trades.
This is a hard task. I challenge you to come up with your non-obvious truths/lies. I bet it is harder than you think. As Matti writes:
If your insights are only in the obvious dominion - you probably have nothing unique to offer and are only going to compete with many others.
The Obvious Truths & Lies
Lie: Retail is coming back to save my bags.
Seems like CT is still waiting for the ‘normies’ to return.
Yet retail is rekt, and due to current macro environment more worried than ever. They have been rekt by ICOs (2017), NFTs (2021), and Memecoins (2024). Every trend was a value extraction scheme where retail served as exit liquidity.
Thus it’s likely that the next wave of capital is institutional.
It’s a take by Chainlink’s God (Zach) that makes sense.
Unlike retail, institutions won’t buy vaporware. They don’t buy ‘governance rights’ for protocols that earn $0.
They will buy tokens with ‘dividend-like’ qualities (fee switch, real yield), clear PMF (stablecoin issuers, prediction markets), and regulatory clarity.
In fact, Tiger Research predicts that “Utility-focused tokenomics failed. Governance voting rights didn’t attract investors.” Thus they predict that projects unable to generate sustainable revenue will exit the industry.
But here is my worry for 2026.
If tokens fail to provide this value, institutions will bypass them and buy equity in the development companies instead (Like Coinbase acquiring Axelar team but not the token).
We are already seeing conflicts in the alignment between token holders and equity holders (Aave Labs vs the DAO).
If we don't fix this, we end up where smart money owns the equity (real value) and retail owns the token (exit liquidity).
For crypto to work, the value must accrue to the token, not the labs company. Otherwise we are just rebuilding the same old TradFi system.
This will be a big issue to follow for the year ahead.
Truth: Quantum risk is real
The risk here has two aspects:
The real risk that quantum computers ‘crack blockchains’ or wallets that depend non-quantum resistant tech
And the perceived risk among investors that the quantum risk is real
Because 1) very few people ACTUALLY understand quantum technology and 2) crypto is dominated narratives, vibes, and momentum, it makes crypto vulnerable to FUDs.
What I mean here is that quantum risks weighs heavy on crypto prices until those risks are fully addressed.
We don’t need a quantum computer to actually drain a Satoshi wallet to see a -50% dump on BTC. We just need a headline from Google or IBM claiming a ‘Quantum Breakthrough’ to trigger mass panic.
In this scenario I see a possible rotation to quantum resistant chains, notably Ethereum.
Ethereum is already preparing for quantum resistance on its roadmap (The “Splurge”). And Vitalik speaks clearly for that need.
Bitcoin can have civil war over a hard fork to upgrade its signature (ECDSA to something quantum-safe).
New L1s could launch with “Post-Quantum Cryptography” (PQC) as their main selling point (don’t fall for this).
Yet if BTC fails to prepare and civil war emerges, it will drag on all crypto assets as MMs, hedge funds etc. rebalance their portfolios.
Truth: Prediction Markets are just getting started
Very few opportunities in crypto are as obvious as prediction markets.
This take comes from Andy Hall, research advisor at a16z crypto. And it’s too accurate to ignore.
Prediction markets already went mainstream in 2024. But in 2026, they will get bigger, broader, and smarter.
Andy says PMs are moving beyond just betting on ‘Who wins the US Election?’ to hyper-specific outcomes.
More Contracts: Real-time odds for everything. Geopolitics, supply chains, maybe even ‘Will Ignas drop a token?’
AI Integration: AI agents will scan the internet for signals to trade on these markets, making them more efficient than any human analyst.
The big trading opportunity is who decides the Truth? As markets scale, resolving the bet becomes the problem. We saw this with the Venezuela invasion(?) and Zelensky markets. Current solutions (UMA) failed to capture the nuance, leading to disputes and ‘scam’ accusations.
Thus we need decentralized truth. Andy predicts a shift toward decentralized governance and LLM (AI) oracles to resolve disputes.
Maybe POLY token will serve some role in it? Where’s your trade here?
Lie: Airdrops are dead
I MUST add this.
Airdrops were and still are the easiest way to make it in crypto. Many believe they are dead as 1) it’s harder to receive larger amounts 2) sybil detection improved.
But if you’re a real user, trying out new apps and using them daily, I believe the rewards will be worthwhile.
Neofinance airdrops should start in 2025, but the big money printers will be Polymarket, Base, Opensea, Metamask…….
It’s even better if CT believes airdrops are dead. Less farmers and competition for us.
Lie: Memecoins are done.
Look, I don’t like memecoins. But sometimes I still trade them.
It’s intellectually 😉 fun to win on a memecoin, sensing where the vibes will shift. The volatility is exciting, and not needing to study tokenomics, revenue flows etc. is what makes memecoins attractive.
The institutional L1s, rev-sharing or governance tokens don’t give that rush. 4-year unlocks are boring. Calculating by revenue makes utility tokens LESS attractive than vibes-only based memecoins.
And financial nihilism didn't disappear on January 1st. Neither will regulation ban them.
When/if the crypto market turns bullish, memecoins will reappear. Incentives for KOLs to shill them are too high. And retail to desperate for a 1000x win.
Keep your mind (and wallet) open if degen trading is your kind of kink.
Truth: Tokenization/RWAs will dominate crypto growth
Very few charts were up-only in 2025.
But growth of RWAs & tokenized assets is one of them.
RWAs are very different from circular DeFi, NFTs, prediction markets, or perps. RWAs are not a speculative pump. This is a long-term shift driven by institutional capital finding product-market fit.
Their projections for 2030 read like they’re from different planets:
McKinsey (conservative): $2-4 trillion
Citigroup: $4-5 trillion
BCG + ADDX: $16 trillion
Ripple + BCG: $18.9 trillion by 2033
Standard Chartered (bullish): $30 trillion
The bullish projections expect RWAs to overtake the ENTIRE market cap of crypto industry as a whole (currently $3.3T).
Blackrock and Larry Fink are pushing RWAs hard. In his 2025 annual letter he compared the current moment to ‘the web in 1996’ when Amazon was still a bookstore, Google not yet founded.
His thesis:
“Every stock, every bond, every fund—every asset—can be tokenized. If they are, it will revolutionize investing.”
The benefits of RWAs are obvious to crypto natives but Tradfi are still learning about it. We are early:
Collateral usability.
DeFi composability.
24/7 settlement.
Programmable compliance.
As crypto natives, how do we profit from growth?
A few trades come to mind:
LINK: Massive oracle market share. UBS, Swift, DTCC all integrated Chainlink for tokenization pricing. If RWA scales, LINK captures the data layer.
PENDLE: Can they attract institutional capital? This allows speculation on yield for degens, and having fixed-yield for long-term holders. Key asset to watch
Lending platforms: Fluid, Aave, Morpho, Euler… Will institutions use these DeFi platforms? Will retail? Key question to follow.
Issuers of RWAs: Ondo, Backed finance, Securitize etc are issuers of RWAs and retail onramp to RWAs.
ETH: 65-70% of all onchain RWA value. BlackRock, Franklin Templeton, JPMorgan are all on Ethereum. The institutional settlement layer. That’s why it’s crucial for Ethereum to offer institutional privacy otherwise new L1s might capitalize on ETH’s market cap.
Stablecoin yield arbitrage: Borrow on Aave at 4-6%, deposit into PT-USD(like) tokens on Pendle at 8-12%.
Could add Maple finance for private credit exposure, and Centrifuge (although I got rekt on it). Anything else I missed?
This will be the trade of 2026 (and beyond).
Tiger Research predicts that “firms will likely build their own chains to maintain market leadership. RWA projects that lack independent asset supply will lose their competitive edge and face exclusion.”
If you just follow one thing, follow where new RWA assets are issued: on Ethereum, Solana, or some new L1s that you have no exposure to.
Non-Obvious Truth: Ethereum L1 is Scaling (Directly)
Most people think Ethereum L1 is stuck in 2020: slow, expensive, and exporting all value to the L2s.
But Ethereum L1 is quietly scaling, and the market hasn’t priced it in.
It was unlike Vitalik when he said that ‘blockchain trilemma is solved’ on Ethereum.
After last year’s Fusaka upgrade, gas limit reached 60m (from 30m). Mid-2026 the gas limits can reach 80 and then 100m+.
With ZK-EVM Ethereum L1 pushes towards thousands of TPS while staying fully decentralized.
Instead of each validator re-executing every transaction, a single proof verifies the entire batch, reducing computational demands. This lets developers increase transaction numbers or complexity without excluding smaller participants. Buterin states these virtual machines are at "production-quality performance," with "safety" as the remaining focus. - DLnews
More activity directly on L1 = higher fee burn = stronger deflationary pressure. Ultrasound money narrative IS NOT DEAD. ok maybe dead for a few years, but can reemerge in the future.
L2s will still dominate ultra-cheap stuff (perp dexes) but the ‘everything must move to L2s forever’ narrative is going to age badly.
Oh, and quantum resistant push by Ethereum Foundation and Vitalik makes ETH an attractive bet, especially if bitcoin core devs f*ck up.
I think it’s a non-obvious truth because rollout is step by step and there is no single hype moment.
Non-Obvious Lie: All regulatory clarity is bullish
CLARITY Act passing? Bullish. GENIUS Act implemented? Bullish. MiCA in Europe? Bullish…?
When I read Coinbase celebratory posts on regulation, I wonder if it’s actually bullish for YOU and ME.
Sure, might be good for Coinbase but things are more complex for crypto as a whole.
First, the GENIUS Act explicitly bans yield-bearing stablecoins.
But I believe this is actually bullish for DeFi.
When stablecoin issuers can’t pay yield directly, where do stablecoin holders go? To DeFi protocols like Aave to earn it themselves.
DeFi lending reached $50b+ TVL in 2025 earning 4-14% APY on stablecoins. Crypto-collateralized lending grew 27% in Q2 2025 to reach $53b.
So the yield ban doesn’t kill yield but it just moves it onchain. Stablecoins flow into protocols, protocols generate fees, tokens capture value from those fees. The whole DeFi ecosystem benefits.
So on stablecoins specifically regulation might actually accelerate DeFi adoption.
But I worry that regulator will further decrease innovation in crypto. Thus our degen days are over.
In the EU, MiCA already banned USDT from every major exchanges. I can’t trade with USDT, sucks.
Beyond stablecoins, MiCA compliance costs are expensive for startups: 250k to 500k eur annually for small firms, and over €540 million in fines already issued since implementation. 75% of European crypto service providers risk losing registration due to compliance costs.
The result is market consolidation favoring in already established companies. Even if Coinbase does not back the current CLARITY act, they will push for what benefits them.
I saw it directly when I was working in Korea: only 4 exchanges were allowed to have KRW deposits. They were pushing for regulation but only to kill competition.
And the US isn’t purely bullish either (The Blocks article explains how DeFi platforms will need to share private information).
Banks are also lobbying to extend stablecoin restrictions to non-interest rewards. As of writing, not sure if it will pass with CLARITY act.
So don’t automatically buy the ‘regulation = bullish’ narrative. Some clarity is ok but some clarity restricts what made crypto amazing in the first place.
Just put the document into Claude/Gemini and ask what that legislation means.
Non-Obvious Lie: Privacy is just a short-term narrative
CT is excited about Monero and Zcash pumping. The narrative is ‘privacy coins are back.’
My non-obvious truth: the real privacy opportunity is in privacy infrastructure for institutions.
Privacy coins are getting banned everywhere:
Dubai’s DFSA just banned privacy tokens
Solid Intel 📡@solidintel_xINTEL: Dubai has banned privacy tokens and tightened stablecoin rules as part of a broader reset of its crypto regulatory framework9:39 AM · Jan 12, 2026 · 247K Views86 Replies · 49 Reposts · 527 LikesThe EU explicitly bans “crypto-asset accounts allowing anonymization of transactions” and “accounts using anonymity-enhancing coins” by July 2027. This regulation is “final” according to the EU Crypto Initiative.
Japan and South Korea banned privacy coins years ago.
Binance and Kraken delisting privacy tokens (Monero)
If you’re an EU citizen and you deposit ZEC from shielded addresses to your regulated CEX, expect problems with your proof of funds report. I’m literally working on forensic reports right now so trust me, bro.
If the funds aren’t traceable, the CEX can’t verify origin, and the user is stuck.
But institutions desperately need privacy
Look at the chart from Tiger Research: US equity market share moved from on-exchange (~70% in 2010) to nearly 50/50 with off-exchange by 2025. Bloomberg reported that majority of all U.S. equity trading occurred ‘in the dark’.
Why? Because chain transparency reveals their trade plans.
Perhaps not the best example but when James Wynn’s 949 BTC leveraged position on Hyperliquid was visible onchain with his liquidation price… Maybe his psyops of being targeted aren’t wrong :)
“Professional trading firms and institutions are hesitant to deploy complex strategies on public blockchains where their every move can be seen, copied, or countered.”
In this context, I see more people talking about Canton. At $5.4B MC, it’s sits quietly at 33rd spot.
DTCC announced they’re tokenizing US. Treasury securities on Canton starting Q2 2026. DTCC. The institution that processed $3.7 quadrillion!! in securities transactions in 2024.
Canton is the first privacy-enabled open blockchain purpose-built for institutional finance.’ Participants control which counterparties can see specific transaction information: unlike public chains where everything is broadcast.
“Many blockchain architectures were developed for open, permissionless environments in which transaction data is broadly visible. While this model has advantages in certain contexts, it is misaligned with the requirements of regulated financial markets. Institutions cannot publicly expose positions, counterparties, or liquidity movements.”
Canton’s backers are tradfi name: BlackRock, Blackstone, Nasdaq, S&P Global, Goldman Sachs, Citadel Securities, HSBC, BNP Paribas, Euroclear…
So, yeah privacy definitely matters.
I would be pooping my pants as my ETH and SOL bags are heavy due to alt1 competition.
Yet Ethereum is also pushing towards privacy.
First, Vitalik is well aware of privacy as currently one of Ethereum’s “known flaws” at the architectural level.
Vitalik Buterin shared a privacy roadmap with 9 steps to improve L1 privacy: integrating tools like privacy pools and Railgun directly into wallets, moving toward ‘one address per application’ as default, and implementing TEE-based RPC privacy.
At EDCON 2025, Vitalik outlined roadmap included:
Read privacy efforts include trusted execution environments, private information retrieval techniques, dummy queries to obscure access patterns, and partial state nodes that reveal only necessary data. These measures aim to reduce information leakage across both ends of user interaction.
Ethereum needs to move from ‘Don’t be evil’ to ‘Can’t be evil.’ Using cryptography to make the system secure even if individual participants are malicious.
Another salvation are L2s: Aztec Network launched its Ignition Chain on Ethereum mainnet. The first fully decentralized privacy-preserving L2. Backed by $170M from a16z and others, Aztec enables ‘programmable privacy’ where users control what’s public vs. private.
Aztec’s co-founder Zac Williamson said:
2025-2035 will be Privacy’s turn of the wheel.
Non-Obvious Truth: 4-year cycle no more.
God, I hope I’m not wrong on this one.
But I believe BTC and crypto has change significantly to escape the 4-year cycle. What makes crypto and notably BTC a prisoner of macro, is exactly why the previous pattern is broken.
This is one of the thesis by Messari in their 2026 thesis.
“As BTC becomes increasingly treated as a macro asset, legacy frameworks, such as the four-year cycle, matter less than they once did. BTC’s performance will be shaped by broader macro forces,”
We are trading a different asset class now.
Miners are irrelevant: Daily issuance is ~450 BTC ($42m). BlackRock ETFs absorb that in 15 minutes of trading. The supply shock narrative is dead because miners simply don’t control the float anymore.
ETFs dampened the volatility: already mentioned in the ‘prisoner of macro’ section. On top, institutions, pension funds are not trading like retail, they have rebalancing obligations thus countering retail-heavy selling of previous cycles.
Liquidity over halving: Overlay the chart with Global M2 money supply and it matches nicely. We broke from this briefly after BTC OGs and 4-year cycle panicooors dumped.
Lyn Alden@LynAldenContactI commissioned a research report, written by @samcallah, to quantify bitcoin's correlation to measures of global money creation relative to other asset classes. Result: bitcoin moves in the directional of global M2 83% of the time; more than other assets. lynalden.com/bitcoin-a-glob…
6:13 PM · Sep 24, 2024 · 685K Views165 Replies · 887 Reposts · 4.37K LikesBTC lags gold: Historically, gold leads Bitcoin by 60–150 days. While many expect Bitcoin to follow. I think this catch-up trade and rotation to BTC will be a stronger than the 4-year cycle.
Jurrien Timmer@TimmerFidelityIronically, gold and bitcoin are negatively correlated to each other. As the chart below shows, both assets have been taking turns lately, as measured by their Sharpe Ratios. From the looks of it, it may well be bitcoin’s turn to take the lead, given that its Sharpe Ratio is
2:44 PM · May 2, 2025 · 71.1K Views32 Replies · 94 Reposts · 507 Likes
In the same Messari thesis for 2026 they believe that Bitcoin will retain strength by absorbing gold’s monetary premium and store-of-value role.
Polymarket is pricing Bitcoin to outperform both Gold and the S&P 500 in 2026. But it's a tight race.
Thus it’s not an obvious truth.
Non-obvious truth: DATs are net-positive for crypto
Standard Chartered's G. Kendrick (head of crypto research) cut his 2026 Bitcoin target from $300K to $150K due to DAT exhaustion:
“…buying by Bitcoin digital asset treasury companies (DATs) is likely over, as valuations ... no longer support further Bitcoin DAT expansion. We expect a consolidation rather than outright selling, but DAT buying is unlikely to provide further support,”
“As a result, we now think future Bitcoin price increases will effectively be driven by one leg only” - He added.
A similar opinion is shared by Grayscale in their 2026 outlook report:
“Despite their media attention, we believe that DATs will not be a major swing factor for digital asset markets in 2026.”
“Much ink will be spilled on these topics, but we do not think they are central to the market outlook.”
DATs own 3.7% of the supply of BTC, 4.6% of ETH, and 2.5% of SOL.
Demand has waned from the peak in mid-2025: the largest DATs now trade at mNAVs close to 1.0 (picture below).
However, most DATs are not excessively levered (or are not levered at all), so they may not be forced to liquidate assets in a downturn.
The largest DAT by market cap, Strategy, recently raised a USD reserve fund so that it can continue to pay dividends on preferred shares even if the price of Bitcoin were to fall.
Grayscale expects most DATs to behave like closed-end funds, trading at premiums and discounts to net asset value and infrequently liquidating assets. DATs will likely be a permanent feature of crypto but are unlikely to be a major source of new demand for tokens or a major source of selling pressure in 2026.
Not gonna lie. DATs scare me. I would be happy if they were a ‘non-story’ issue for 2026.
But they do matter.
For ETH, DATs already outpace ETFs.
And unlike BTC DATs, ETH treasuries use their holdings. BitMine staked 74,880 ETH ($219M) for the for 3% yield. SharpLink Gaming earned 1,326 ETH (~$6M) in staking rewards since June 2025.
BitMine is developing the “Made in America Validator Network” (MAVAN), targeting $363-485M in annual staking rewards by operating its own validators. And investing in MrBeast. Which is confusing but I like experimentation.
BTC is non yield bearing. But ETH DATs are turning treasuries into productive infra for validators, liquid staking, DeFi yield farming.
This is another big reason I feel bullish on $ETH in 2026. Quantum roadmap + Scaling the L1 + more sustainable DATs.
BTC, SOL and ETH have ETFs that compete with DATs.
But most altcoins will remain too risky, too illiquid, or too legally complex for ETFs.
That makes DATs an ‘IPO moment’ for altcoins. It’s the simple way institutions can get compliant exposure.
I believe these DATs can focus attention on which alts are worth bidding.
Because there are thousands of alts and only small majority could pull-off a DAT structure. Thus this focused user attention and money flow into a few pumpable assets.
But I worry about DAT insider trading. Last year, the SEC and FINRA investigated over 200 DAT companies for stock pumps days before DATs announcements.
Plus, retail hate it that VCs exit their allocations into DATs instead of dumping on spot markets.
Overall, if:
DATs for BTC become a non-story in 2026, and
ETH DATs continue to stake in PoS and DeFi protocols, and
Altcoin DATs expand for high-quality assets
Then I believe DATs are net positive for crypto in 2026.
Yet, in the downturn DATs will add to the dumping-fest. But that’s nothing new as retail are as dumpooors as institutions are.
Non-Obvious Lie: Return of ICOs Fix Token Issuance Model
ICOs are back.
MegaETH raised $450m in one of the most well-thought out model.
Echo got acquired by Coinbase for $375M.
Kraken partnered with Legion for ‘fair’ sales.
MetaDAO pioneered ownership token sale
The narrative is nice: retail finally gets the same access as VCs. Fair launches. Equal terms and democratized participation.
Indeed, return to ICOs was needed because low-float, high-FDV airdrops were unsustainable.
We do want go back to early ETH ICO days to get 450x return.
Thus ICO 2.0 platforms promise to fix this. Legion uses ‘merit scores’ based on onchain, social, or dev activity. Echo lets retail invest ‘alongside VCs on equal terms.’
I love it! Because my X account gives me access to the best deals, like the 50k allocation to MegaETH sale.
But ICOs don’t democratize token issuance:
All require KYC (gating out most of the world). I, as EU citizen, couldn’t buy Monad sale on COINBASE?!
Reputation scores (favoring existing insiders, KOLs)
Allocation caps that VCs don’t have or smart-whales bypass through multiple wallets.
The token-printing mechanism always changes. From BTC forks (Litecoin), then ICOs became IDOs. IDOs became airdrops. Airdrops became points farming. Points became allocation scores.
But the flow of value keeps moving toward those who 1) already control the dealflow and 2) know the rules of the game. I wrote about it in my previous post.
The good thing is that ICOs shows the true demand for the token. Because airdrop farming with inflated numbers hid the real demand for the token.
But if/when the market heats up, retail will likely get at 10-50x worse entry than seed investors, with vesting schedules that unlock into sell pressure. On projects that already captured most of their upside privately.
Again, I love the ICO meta as I can get access to the best deals. But for most of you?
Non-Obvious Truth: “All crypto cards companies will eventually die”
I took this hot take from Pavel Paramonov:
Main points why he believes crypto cards will die:
They run on Visa/Mastercard, so no real disruption.
Easy to copy: most are just branding on shared infra (Rain that raised $250m at $2B val).
Centralized + KYC, opposite of crypto’s goal.
Extra fees/taxes users won’t tolerate long term.
Direct wallet payments replace them once adopted.
All great points and I agree that most crypto cards will close shops. In general, most startups fail, so easy to make this statement :)
There’s already proof that stablecoins would enable direct P2P payments. Interactive Brokers adding USDC deposits is massively bullish crypto.
Yet I believe that two type of ‘crypto cards companies’ survive:
Those like Etherfi that offer borrowing with crypto as collateral. Even CeFi platforms like Nexo, Bybit, Crypto com offer cards and that won’t change
More importantly, crypto card companies are becoming neobanking apps that 1) offer banking services and 2) building their own payment networks.
Payy, for example, is building a privacy-focused but regulatory compliant payment L2. Their card is just the first use-case of that network. If their network is successful, their own success (enabling P2P transactions) would make cards obsolete.
Base is betting on this BIG with their Base app.
But the chance of that happening is low. Imagine replacing Paypal, Alipay or other entrenched players in their game.
What’s probably more likely to happen is Revolut enabling direct stablecoin payments and most crypto native payment solutions are … dead.
The truth is that crypto cards will still be big businesses for years to come as 1) banks are unwilling to accept deposits from crypto exchanges and 2) tax evasion with crypto cards is a big PMF.
But regulation will eventually catch up with crypto card companies or their users.
The success case of stablecoins is in direct competition with crypto card companies. If stablecoin payments pick up, cards aren’t needed.
It’s quite likely that current crypto card payments become neobanks and try to compete with current neo finance apps like Revolut. So yes, crypto cards that don’t become neobanks will die.
Big upside, if they win!
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