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What's Next for Crypto? | 2026 Year Ahead For Markets
Recorded: Dec. 12, 2025 Duration: 1:02:53Space Recording
Short Summary
In a recent discussion, crypto experts analyzed the evolving landscape of the market, emphasizing the shift towards selective investment strategies as broad-based rallies fade. Key topics included the implications of macroeconomic trends, the rise of institutional interest in DeFi, and innovative token mechanisms like CAC tokens, all pointing towards a more mature and discerning crypto market in 2026.
Full Transcription
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Music Music Music Music Music Music Music Music Music Music Music Oh I'm going to go to the next video. The Oh I'm going to go to the next video. Thank you. I'm Thank you. Music Thank you. Hi everyone, we'll get started in a few minutes.
We're just waiting for a few more people to tune in and we will get started soon.
Thank you. Thank you. Thank you. Jason, if you're there, I invited you to speak.
Then Kevin as well. All right. Hi, everyone. How's everyone doing today? Jason, LTR, Marcus, are you and Mike's working?
Yeah, what's up?
GM, GM.
GM, GM.
Alrighty, so I think we are good to get started.
So, all right, let's get into it.
Thanks, everyone, for joining.
So before we get started, so just real quick,
so before we get started, I'll read out this quick disclaimer.
This content is not financial advice and is provided solely for educational and informational
purposes. Delphi is not a broker slash dealer nor a registered investment, legal, or tax advisor.
Nothing said on this X basis is or shall be construed as a recommendation, solicitation,
or offer to buy or sell any
token, security, or financial instrument.
All opinions presented in this content are exclusively those of the individual speakers.
Consult with a qualified legal, tax, or financial advisor before making any investment decisions
or otherwise acting in reliance on what you're contained herein for any purpose.
All right, let's get into it.
Thanks, everyone, for joining today.
I am Minty.
I'm going to be moderating today's X-Bases.
And today, we're going to be breaking down our 2026 year ahead from markets report that just came out yesterday.
It's a great report.
If you haven't had a chance to take a look at it, you can see it on our profile right now.
So the purpose of this XBASIS is just to talk about, this is like we're talking with our markets team about what we think is coming for crypto,
the macro setup heading into next year, and where there could be potential opportunity.
So today I've got our markets team and our head of research here.
Let's do some quick intros. jason you want to start us off
yeah sure excuse me uh hi yeah i'm jason i'm i guess head of markets at delphi uh and yeah it'll
be fun to talk about some markets okay um your volume is a little bit low is there any way we
can get that up a little bit sure yeah all right. All right, that's perfect. Thank you so much.
All righty.
And then how about you, Marcus?
Hey, this is that 1618 guy.
People call me Marcus or vice versa.
I'm working with Jason on the Marcus team.
Happy to be here today.
And then LTR, you want to introduce yourself real quick?
Hello.
It is Lontrevious, LTR. You want to introduce yourself real quick? Hello. It is Lontrevious, LTR.
I shitpost and then I do write occasionally as seen in the report.
So I'm happy to chat about it.
And then we also have our co-founder, Kevin.
I don't know if you want to introduce yourself real quick.
What's going on, everybody?
Yeah.
Co-founder of Delphi,i chief janitor markets enthusiast excited
to be here excited to be with you guys i'm excited too and that's the crew that we're going to be
talking with today also ceteris ceteris i don't know i don't know if you want to speak today or
not but if you are i did i did give you the invite to speak.
But if not, that's okay as well.
All right, so I'm going to get into it.
All right, so we're going to be running for around, I'd say, 40 minutes to an hour.
I will be moderating, asking questions to our markets team today.
If you haven't read the report yet, it's on our portal, and I will have a pinned on our profile as well.
So let's start with markets.
Jason, Marcus, Kevin, this one's for you.
So heading into 2026, I see that the markets report opens up with some tension, right? Like you said, the charts look like 2018.
Sentiment is a bit rough, but you argue the underlying inputs are different this time.
QT is ending.
The Treasury General account is shifting. Do you think we get easy mode back in 2026? but you argue the underlying inputs are different this time you know qt is ending the treasury
general account is shifting do you think we get easy mode back in 2026 or do you think like the
market has structurally changed too much and i'll let any of you just start talking
uh yeah no i'll give a first stab at it and then maybe kev can kind of talk a little bit deeper on on some of those input differences but kind of to take the second part of that um do i think like we're we're excuse
me um do i think we're heading into like easy mode like no i i don't think so and i think like
it's kind of a um like a core a core part of of report, like a core theme of the report is that the,
the broad based like rallies of, of, of yesteryear, you know,
like 2020 is the best example of pretty much like every coin going up 10,
20% a day. You can just, you know, own a basket of coins.
You could just throw it, you know,
a dart at a dart board and pretty much everything would go up.
Like those days are, are are clearly um behind us for for a variety of reasons right um that we'll get
into um uh and it's it's not like a new a new trend it's something that's like pretty much been
manifesting over the last 12 to 24 months it's something we highlighted in last year's year ahead report,
you know, that kind of like dispersion. And it's something we think is going to continue mostly into next year and into probably, you know, future years as well for a variety of reasons.
And we'll get into like the crypto maturation thesis a little bit later, but that's like kind
of to like shortly answer that second part
is like, are we going back on easy mode?
No, I think a lot of things would need to really happen
to get back on true easy mode.
But I do think we are probably trending
into a easier environment than we've been in
for the last several months,
which has been extremely challenging to, to say
the least. But yeah, maybe Kev can jump into a couple of the, the reasons around, you know,
global liquidity, central bank paths, both in, in the US, Europe, Japan, China, to kind of like
explain why we think it's probably a bit better, you know, than, than 2018, even though the charts kind of look a lot like that.
Yeah, I'm Marcus. I could jump in after Jason. I do echo Jason's sentiment as well. Definitely
this year has been unique in some sense. We've seen liquidity from the PBOC go up. We see Europe's liquidity
stagnate. They're not specifically stimulating into this environment. And the US as well,
we have not seen the US raise liquidity ever since 2022. So we can dive into this deeper. But in general, ever since 2022, if you look at the
US net liquidity, it has been on the downtrend, right? So we're looking for a reversal in liquidity
in general and coming to 2026, especially with the end of QT in December 1. I think that signals
a bigger change in trend.
I know there are some arguments out there that, you know,
even though QT ending is not a sign that QE is going to come back,
but it is what the Fed is trying to tell us.
So I take it as a sign coming to 2026,
we're going to see some more signs of easing.
We're definitely not going to get some more signs of easing we're definitely not
going to get like a 2020 style of liquidity injection but we're going to see something
more of a you know a more well-timed injection of liquidity cool um kevin did you want to jump in? Yeah, the only thing I'd add quick is I agree with obviously those takes. I don't look at this as anything close to the 2020-2021 real liquidity spigots flooding in. I do think the backdrop more broadly gets certainly like more constructive.
I think one of the big differences now, and we go into this pretty deeply within the report and have an entire section on it,
it can get a little bit nuanced. And for those who aren't too technical on like the Fed's balance sheet and how this all the actual financial plumbing operates,
sometimes it can be a bit confusing.
gonna be a bit confusing. So we tried to lay out like our best thesis around, you know, why we
think this is the case and why these trends are going to continue in the direction that they are.
I think the big one is, you know, we've talked a lot in the past about this idea of massive fiscal
deficits and debt monetization. And our original thesis around Bitcoin, when we even started Delphi
was on this big kind of currency debasement,
broad-based currency debasement thesis and trend.
And the reason why is not, it's more from a pragmatic standpoint.
It's not, you know, hey, if we have more liquidity,
obviously that's great for Bitcoin.
It's great for, potentially great for certain crypto assets.
You know, as bag holders, that's certainly, you know,
something positive you can look forward to.
But from a very pragmatic sense, the math just doesn't math anymore. When you look at these
massive fiscal deficits, what it's doing to crowding out funding markets, which are an
extremely important part of the financial plumbing, not just in the US, but for the global financial system,
all these things kind of lead to more liquidity because the system needs it at this point.
And it's a lot more fragile than people think. And so we kind of go into it and don't tease too much, but how we think this is going to happen, why it's going to happen, who the major players are
within the financial plumbing and what their incentives are. And what you wind up finding
is that it's extremely fickle. I'll put it that way. So I'm happy to dive into more detail. Don't
want to spend, you know, all the time on that. But I think it's a really important part of this
report that people should definitely take a look at because it helps to explain not just how we
got here, but why we're here
and why we think, again, this liquidity trend has to continue.
There's really no other option.
Yeah, thank you for that.
Right.
So, you know, we do see like the macro setup is improving, right?
Equities and gold are like chasing new highs at this point, but crypto just seems to be
like under under
performing compared to those right and so you see like you see like sentiment on ct like
just like really rough these days like why do you think crypto is like lagging behind these other
asset classes and do you think like this will change in 2026 and you know uh any of you can like just start yeah yeah um it's a it's a good question uh and
you know it's definitely something that's been you know dominating the vibes across you know
crypto natives at least for uh for a lot of the last two years um and so yeah like i think you
can look at cryptos like two different things, right? Like you have Bitcoin and then you have like everything else. Bitcoin is effectively decoupled from crypto. It's ascended to a macro asset with that digital gold slash currency debasement type of narrative behind it, right?
currency debasement type of narrative behind it, right? And we've clearly seen that
the wealth effect from Bitcoin's price action and Bitcoin's price appreciation
no longer cleanly, you know, flows through to the broader crypto market, right? The holder base of
Bitcoin is very different from the holder base of, you know, almost everything else.
And that's kind of why you've seen a lot of this dispersion, right, over the last, you know, two years, a lot in 2024, a lot in 2025.
I know Bitcoin hasn't really had a great year on like a year-to-date, you know, performance metric standpoint.
But generally, over the last two to three years, Bitcoin has performed really, really well.
But the same can't be said for, you know, the broad crypto market.
So you kind of have this dispersion.
And it's, you know, it's clearly due to, at least in our opinion,
a couple of things, right?
We talked about a lot about, you know, the structural demand
behind a couple, you know, behind Bitcoin, for example.
You have ETFs, which drive billions of dollars in passive flows,
which has carried a lot of Bitcoin's price appreciation
over the last year or so, pretty much since they went live in January 2024,
so about two years now.
On top of that, we had Saylor by himself for most of the cycle, and then recently, we've had other dats come out. So you have all of that buying pressure. Bitcoin debt demand is more than all of the other assets because the wealth effect wasn't shared due to the fractured holder base of the assets.
And so that's kind of why Bitcoin has done well, like objectively has done well.
And then everybody else is kind of like, oh, well, I don't own Bitcoin, so I haven't done well.
And then within crypto, you've seen just like all of these siloed metas over the last two years.
We've seen effectively what everybody now calls like the hot ball of money rotate from one thing to the next.
So for a lot of 2024, you had, you know, the meme coins and you had the majors, right?
And if you didn't hold those, you underperformed.
And then, you know, at the end of 2024, hyperliquid TGE.
And then if you didn't own hyperliquid, you probably underperformed, right?
And then you had like the launchpad wars, right?
The Perpdex wars, right?
You have all these like mini narratives pop up,
but they're all super siloed.
And the reason is, right?
Like there just simply isn't enough money
for everything in crypto to go up, right?
The number of tokens and projects in crypto continues to increase exponentially.
So like the surface area for a finite amount of dollars to flow through is just increasing over and over due to tokens launching,
new unlocks, innovations like launch pads, right?
Like all of this stuff is just kind of, you know, saturating the market with places
for dollars to go. So ultimately not enough things can sustain bids. On top of that, most projects
don't have really great value accrual mechanisms. There are no structural bids behind them outside
of, you know, a couple, you know, hyper liquid tokens that have buybacks, things like that.
So it just like created a really like tough environment for crypto altcoins to do well en masse,
which has led to the deterioration in Vibes.
And then you mentioned crypto equities, right?
If you're a TradFi investor, you're unequivocally interested in crypto now.
How do you want to get that exposure?
Well, you could get the majors through the ETFs.
And then you could just probably bet on crypto equities
because they're businesses that generate revenue.
They're familiar to you. They're very much correlated with the crypto market cycles.
So crypto equities, you know, effectively vampire attacked a lot of the speculative bid that might have otherwise flowed into altcoins like we've seen in the past.
So, you know, there's a bunch of other reasons we listed in this report. And it kind of is,
like I said, at the top of this, like a key theme to kind of like describe what's been going on and
what we think will continue into next year. And yeah, it's just like a really interesting dynamic.
And like, I think the takeaway is, you know, like markets mature, and it's not too unlike
traditional markets. You mentioned TradFi markets are near all time highs. When you look at like the breadth of assets near all time
highs, it's actually not that many, it's kind of narrow leadership. So all of the outperformance in
equities is concentrated to, you know, a select several names, which isn't very different than
what you see in crypto. So it's actually kind of maturing into a market structure that you might kind of expect given, you know, the history of equity markets and how we've seen those
develop and mature over time as well. Thank you. Yeah, two points really quick. So tying it to the
macro as well, I mean, I think this year what what has become pretty
apparent is this is the year of institutional uh money uh you know as to what jason said we've seen
a lot of capital flow directly into the bitcoin ibit products right and um a lot of these
narrative um movements and the rotation of money it's the it's mainly the money flowing into Bitcoin,
and then the Bitcoin holders get wealthy, and then they recycle money into the other altcoins
and the other narratives that moves. So if we tie this back to the macro, we haven't seen
US net liquidity rise. So everybody's not having the same amount of purchasing power,
buying power the same way they did in 2022. So in that way, in that sense, it's really going to
be very different from, you know, from that general market. And what we've seen so far is this
money flow from Bitcoin into the other altcoins, and then the other altcoins would move according
to which narrative is hot that season, and then the money just quickly rotates out.
So yeah, we've seen this general trend in the market so far.
Great, thank you.
All right, so you also have this whole section on like the US Treasury, like market fragility.
Hedge funds are now running basis trades now and are now bigger holders than Japan or China.
There's like $10 trillion to refinance in the next 12 months. Is that something to be like
concerned about? Like how close are we to something breaking? And then how would that affect crypto?
something breaking and then how would that affect crypto?
Yeah, I can take this one quick, and we'll try to speed run through it. But I think the short
answer is we're a lot closer than people think if nothing is done, and things are being done to kind
of counteract us to set the stage in the important context is, as you mentioned, the US is running
massive fiscal deficits, right? One half $2 trillion per year. And so what that means is the market has to essentially absorb all this new
U.S. Treasury issuance every year. And so for the last couple of years, the Treasury has been
essentially front-loading a lot of that issuance with more and more T-bills, right? Short duration
debt, very short duration debt. Trend that we saw with Yellen that started,
Bassett, even though he had prior criticisms of this, came in and basically continued that
strategy. And the reason why is because there isn't really an alternative for them. I think
the Treasury market has become very much, or the US Treasury itself has become very much a servant
to the bond market. And where this gets interesting and why I recommend people go and dive into this
specifically in the report, because we lay all this out, is when you actually look at the
construction of the U.S. Treasury market, long-duration bonds, right, the long end of the
curve, the Treasury curve, is really being cropped up by what I would call like a concentrated cohort
of primarily like opportunistic buyers. So hedge
funds, to your point, are now really like have become the incremental buyer of long duration
treasury debt. And so why it's important is because, again, going back to Besson wanting
to issue like shorter term T-bills, you can't really term out that debt or issue a bunch of
long duration debt because that'll risk sending bond yields higher, which triggers
into higher equity volatility.
And because these hedge funds are the ones who are running these big multi-stillion dollar
basis trades, the risk is that they de-gross and they de-risk.
And when they de-risk positioning, that basically threatens one of the largest sources of incremental
demand for the long end of the curve in the first place, right?
So a lot of this stuff is like really intertwined when you look under the hood.
And the way in which they're financing these positions is through the repo markets, and
that's the funding market.
So as we've seen tightening in repo markets and rates potentially starting to pick up
there, why that's been a big threat or a big risk is because
you kind of have this circular notion of sorts where hedge funds are now the biggest cash
borrowers in the repo market. But at the same time, they also represent massive demand and
buying power for long-dated treasuries. And you essentially need to have cash supply there for
this trend and this trade to continue.
And what we're seeing now, and why I say we're closer than people think, but there's things being done, is as funding has gotten tighter and the typical sources of providing that cash into these markets has gotten tighter, hedge funds are still a huge source and have huge demand for cash borrowing.
And so that's what we mean by massive fiscal deficits crowding out liquidity.
This all kind of ties full circle.
And what you basically need to do is start to open up liquidity valves
so that this doesn't become a huge issue, right?
You don't have some type of repo crisis like we saw back in 2019.
And I think the way in which the Fed's already
starting to do this and signaled they're doing it yesterday, and I think this is probably the
easiest and most straightforward way to do it, is they're going to lean heavily on the banking
system. So rather than the yesteryear of the Fed running actual like big QE and, you know,
all the potentially negative headlines that come with it, I think the Fed's really going to wind
up having the banking system do its bidding. And it has to do that because we're going to continue
to run these massive deficits. And so we're in this world now where potentially getting into
next year, you've got, we'll call it better monetary or more expansionary monetary policy.
Again, not floodgates necessarily, but liquidity expanding. At the same time,
you've got very expansionary fiscal policy. So it's an interesting backdrop compared to what we've been in the last
couple of years, where the currency debasement trades, gold, Bitcoin, those can continue,
I think personally can continue to do well. At the same time, other sectors, especially,
you know, high growth sectors, things that are tied to real economic activity, productive assets,
like those can also do well, right? All that's to say is I'm not in the camp that we see some
big recession next year. If anything, I think we see a reacceleration in US growth. Because again,
the fiscal support and now let's say monetary support that is backing these fiscal deficits,
that is a really potentially powerful combination.
But the takeaway is like fiscal dominance is very much, I think, in the driver's seat right now.
So, you know, that's what we have for the markets so far.
I do want to like shift gears a little bit.
And also because we don't just cover markets in the year ahead report.
We also cover other high level trends like the infrastructure one, right?
So this is more geared towards Longtravious.
So I'm going to ask Longtravious questions.
So in 2025, towards the later end,
we're starting to see institutions like Stripe and Robinhood
start to build their own chains, right?
And so how does this affect the general layer ones that are out right now and roll-ups,
you think?
I mean, I don't really think it affects it.
Honestly, I think that's a common misconception is that Tempo is primarily being used as a
Rails for Stripe's existing consumer set.
And so if anything, it's going to be more of a net onboarding experience and the fact that you know people like clarna stripe are gonna have all these chains
where they then basically introduce users to on-chain experiences or using on like using the
chain without even knowing it um and so i don't really think it means much for layer ones um unless
they are specifically focused on payments like i think it's going to mean more for maybe certain apps on layer ones.
Like, you know, like some salon of payment services will definitely see some like competition
and stuff.
But overall, the main thing I said in that report is that none of these larger companies
want to pay rent.
I mean, they have more users by a great magnitude than any L1 in existence.
And so they're not going to, you know, pay rent to another chain and like do that kind of thing.
They're just going to build their own and own the vertical stack.
And I think that's like what we're trending towards is more of a
verticalization in crypto as a whole.
You can see it with like ink chain recently is like everything on ink chain
is owned basically by ink and by the foundation.
And so you don't have any leakage in value across the entire stack.
And I think that's the path we're going on at least.
Cool.
And also, I know with DeFi, a lot of people are starting to be a bit bearish on DeFi.
We've seen things like smart contract exploits, you know, the threat of AI to smart contracts.
But you highlight Aave's like TVL starting to rival like the top 50 US banks and protocols like 3G and using like ZKTLS for like under collateralized lending.
Do you think DeFi can actually like be a challenger to traditional banking, or is it stuck in its own alternative universe?
Nathio, are you there?
Yeah, sorry, I'm there.
Yeah, I was going to say that I think DeFi is actually,
I'm very, very bullish on DeFi, actually,
because it's going to allow things that weren't enabled before.
And what I'm highlighting in the report, like you said, is that yes, Aave has this liquidity
network effect.
First of all, Aave is much more compostable.
It's much easier to use than interacting with any side of normal bank.
And they aren't a neobank, but they might be going towards that with their new apps
and stuff.
But what I'm really interested in is on-chain credit and underclap is kind of the area we're moving towards in general.
In the fact that BlackRock's Build-A-Fund on-chain, Aave, a lot of these things,
they offer the T-bill rate, even USDC on Coinbase, they offer the T-bill rate. And so
something like Maker can't have a competitive moat anymore by just offering the T-bill rate
to their consumers. And so they're going to go further and further down the curve and try and find yield from
more exotic sources.
And they've already started to do that with like daylight, you know, they're using like
solar energy and like taking over unused solar capacity and energy capacity to then offer
yield to token holders.
Same with USDI and like GPU leasing.
And so I think we're going to see more of that because
that's what defy really enables is that sort of like network effect across the globe that that
couldn't be possible with some sort of centralized entity like a bank but i don't think we're going
to see the the normal like us like a new stable just offering four percent like it's never going
to be able to take off the ground because like tether and usdc already do that and then you can
just deposit into ave to get that very very safely um regardless so i think defy is going to go more towards under clap
credit and then like rwa based yield okay um and i guess one thing i've talked about you talk about
in the report as well is like the agentic economies like we've seen like
you know the rise of the rise and fall of like ai agents but you bring up like these new
developments that are coming right like you talk about how agents can now pay pay other agents
autonomously through like x the x402 standard and then also things like machines and machine
transactions like do you think you know these sort of developments become a real use case in 2026,
or are we still too early to the curve here?
I think a real use case may be not.
I think at a base level, I think we're going to see it go up a lot.
I'm really bullish on the pay-per-use thing.
I think that enables a lot.
How many of us are really tired of paying for a subscription just to access one article
or use something one time?
And that's really what like X402 enables is that you can just pay per API use.
And that's going to be really big.
I think we're going to see more and more agents transact on chain, like be operators.
I think we've already seen that with a lot of like the AI DeFi things where you delegate
to an AI and it finds the most attractive yield.
But even more so,
I think that's going to come about for a lot of things, whether that's like automatic payment
settling, et cetera, et cetera. Especially with like the combination of like 8,004, I mentioned
on top of X402 that allows like an identity layer to these agents and allows them to like have a
history and maybe possibly get credit lines back to my previous point about on-chain credit. It's kind of working together, like all
of it is. And that's like the true enabler of DeFi is that it's all kind of open source. And so
you have this network effective builders where they can combine and iterate on things in such
a speed that wouldn't be possible with anything like more centralized.
Do you think?
Real quick, I had a question for LTR.
One of my favorite parts of the report was this term that you coined CAC tokens, and you kind of used WorldCoin as an example and then kind of compared it to what some TradFi companies might explore doing with their incoming TGEs and tokens.
You want to dive into that one a bit?
I thought it was super interesting, super compelling, and I hadn't seen anybody really talk about tokens from that perspective, at least not recently that I can remember.
I thought it was a really, really good section that everybody should read. Yeah. I mean, like CSE tokens are something I've been chewing
on for a bit, mostly because I saw like the world app ecosystem was growing at a pretty rapid rate.
Things like credit.cash, the defi on the world app, we're getting tons and tons of TVL. And like
crypto has such, you know, an aversion to that thing, to world app in general, just because of
KYC and whatnot.
And I get that.
But I like to zig when others zag.
And so I really looked into that eco.
And then I just found all these charts, both from like the Oro claims, the new verified
humans, new active addresses.
And it was like basically up into the right at a pretty exponential rate.
And like the pure numbers were pretty insane, like millions and millions of users, something
we don't see unless it's like something like phantom um and so they were rivaling those
platforms and i'm like well then i looked at like the world coin chart and it's just like down only
right like price wise you just look at it it's just sad and i was like this makes zero sense
like we we don't really see this anywhere else and so i dug more into their mechanisms and
essentially world is again just used as a customer acquisition cost token, AKA, they basically just pay people to come, you know, sign up KYC for the app and then use the app.
And they continue to get payments and rewards, which makes like a circular economy as far as then they use that world in the app on the other apps that people have built inside of world app.
And so you end up with this weird chart where it's in the report and it's a
good chart where the market cap of the world has actually stayed relatively stable. If you look at
it just from a market cap term and not a price term, it's basically like a pretty flat line,
which is pretty interesting given how price has gone down. And that's just because
the inflation has offset the collapse in price. And basically what happens is those token holders, the new entrance into the
world app economy bear that new inflation. And so it's not just like a bunch of bag holders just
seeing their bag devalue. It's actually new holders coming in and adding to the ecosystem.
And what's really interesting from a numbers perspective is that if you really dive into
the customer acquisition costs, like actual costs, they've spent over $300 million in world, but they haven't actually spent $300
million, right?
They basically effectively, I don't know, wave the magic wand in a sense and allow the
token holders to basically each individually hold that cost, which kind of spreads it out
across like 30 million people.
So it's just a really interesting mechanism,
especially as we continue to have tokens
that are just like financial means
or greater full investing type of things.
Like I buy this and go up,
where a world is basically saying like,
no, you really shouldn't buy our token.
It's mainly used as like a rewards mechanism
to onboard more people.
And it's like the CAC tokens,
I think we're gonna see way more of.
Solana Seeker the phone
just announced their secret token and if you look at the tokenomics it's like basically a CAC token
they're going to use it to get more people to get on the phone right and I think we're going to see
more companies that already have equity do this as well like if you're base right and or if you're
base and coinbase and you already have coinbase stock and then you're going to launch a base coin
well what will that base coin do and a lot of people will be like, oh, it's a lot of money on
the balance sheet. Right. But there's a certain inflection point where the marginal dollar on
the balance sheet won't be as much as a new acquisition of a consumer. And so like at that
inflection point, I think base will be used as like a means of distribution to onboard more
people into the ecosystem. Thank you for that thoughtful response.
All right, so do you wanna like shift gears back a bit?
So we have in the report,
like you guys note that like we have billions of dollars
in unlocks hitting the markets next year, right?
Like a lot of tokens, you know,
vesting schedules are gonna start hitting,
unlocks are gonna start happening. Do you think real revenue projects like Hyperliquid can absorb that
supply shop? Or do you think like these tokens will just end up like having like similar downtrends
compared to like what we've seen so far? Jason, I think. Yeah, I can take it first and then if anybody else wants to chime in.
I think it's a case-by-case basis, right?
I think we're past a time where we could just be like a bullish unlock,
bearish unlock because of XYZ.
I think at this point we really just have to look at each individual token
on a case-by-case basis and decide relative to that.
My thinking is effectively like if a token has been going down for the majority of the last year or two,
and there hasn't been unlocks, and now there are going to be unlocks,
there's probably not a good reason for it to not keep going down right um
there's probably not a good reason for it to not keep going down.
and with the case of hyper liquid right like it's been a you know one of the strongest tokens
you know year to date over the last you know since it tged all of that good stuff all of
its fundamental metrics are pretty much up and to the right it's obviously you know started to face
some competition from uh other perp dexes lighter aster paradox right all these other ones um but generally speaking uh
everything is is looking good on the on the fundamental standpoint and prices you know kind
of suffered uh a lot over the last you know pretty much since 10 10 when everything went to and then
it's had like a bout of relative weakness since its unlock started right on November 29th.
And using like hype as an example, right?
It has a, you know, an assistance fund
and buyback mechanisms that can be used to,
you know, directly offset unlocks,
which is probably like the, you know,
setting the bar for what protocols similar protocols at least other
perp dexes things like that will need to do to offset you know similar things right because
other perp dexes will have unlocks so like generally speaking like you need some kind
of structural demand mechanism to offset all of the supply coming to the market and that
structural demand has to come from somewhere with majors and things like that
you have etfs institutional bid um with hype like i said you have the assistance fund things like
pump for example they have their their buybacks uh uh and and so like you generally need to look at
like how much the unlock is going to be like what the like marginal sell pressure coming to market based
on each unlock is and if there is generally enough you know structural demand to at least absorb
a decent portion of it right like you shouldn't expect your token to outperform significantly
if it's going through a period of like you know consistent heavy unlocks that like you have to
you know calibrate expectations but price action can be you know, consistent heavy unlocks that like you have to, you know, calibrate expectations.
But price action can be, you know,
negative price action can be mitigated if, you know,
the protocol's a fundamentally solid thing
that gives people a reason to own it outside of, you know,
price go up in the next, you know,
one, two, three, four month candle type thing
on top of, you know, actual structural demand.
So like, I think most tokens will go down absent, even if they didn't have unlocks like i think most tokens will go down absent even even
if they didn't have unlocks i think most tokens would go down because there's not a good reason
to own the majority of tokens um right now uh and then with the unlocks it's just like even more
it's almost like like thanos like it's inevitable that most of these tokens go down um and so that's
why i said you have to just like kind of be very discerning. You have to be very calculated with what your assumptions are around sell pressure.
So for example, what I look at with hype is they had their first unlock.
It's $300 million roughly depending on whatever the price of hype is a month and unlock.
So it's like almost 10 million hype tokens.
So you have to look at that and be like, okay okay that's a shitload of hype because it is but how much of
that is actually being unstaked and sold right and so the team did some things and and only 2.6
million was hype was unstaked right after the unlock right so let's see what they do you know
next month and the month after i think extrapolating the team's actions after one month
isn't, it's not the safest bet, right?
It's like, okay, you could do it,
and it would be the risky bet.
It's like, okay, if this is the standard they're setting,
you could kind of underwrite what you think
the market expectations are around future unlocks
and maybe find some delta there.
But generally speaking, I think after you see
what unlocks look like for two, three months, the market will better be able to underwrite future sell pressure specifically on
something like hype better than it is able to do today. And then I think it probably re-rates to
what it should be worth based off of that and what, buybacks are able to absorb if you go on like an annualized or
like a 30-day rolling basis of some kind. So yeah, that's like a long-winded answer, but like,
yeah, it's nuanced. It's like, look at each token, yeah, and go case by case.
Do you mind if I ask a question off script a little bit?
Do you mind if I ask a question off script a little bit?
Yeah, sure.
Yeah, sure.
So, you know, we've seen like a lot of debate like this on the timeline about buybacks in general.
Yeah.
I guess it's a question for all of you.
It's like, are buybacks, like buybacks are growth?
I guess that's my question.
Can you read which do you think like do you think like buybacks are like
like good in general or is like context dependent or is like yeah companies be using like it towards
growth basically i is so i guess the question is is probably better stated um is buybacks the optimal use of capital for a business and if if somebody
was to ask me this question in trad fi i would almost certainly say no because like when you buy
back your own stock unless you unless you believe your company is severely undervalued that's like
you know very different but like if you buy back your own stock you're like implicitly kind of
stating that like you don't think you can find any other, you know, investment opportunities for your business that would, you know, outpace the growth of your equity over, you know, that, right?
Like it's kind of like bearish on your like future business, like expansion type ideas.
So like generally speaking in TradFi, like I would answer no.
In crypto, it's probably like generally speaking, I would say no.
But I do think buying back these tokens isn't, it's not the same as buying back equity.
I think there's a lot more optionality you can do down the line if you want to with those
bought back tokens.
You know, John Sharp wrote a whole proposal on that.
I don't, you know, I don't think it was,
I don't think it like really had legs,
but like, you know, people have proposed things
of different ways that, you know,
the assistance fund and hyperliquid should treat buybacks
and things that they could do with them
instead of just, you know, buying back
and holding or burning and things
like that. So yeah, I mean, it's not a great answer. I think it's definitely case dependent.
I think generally, it's probably not the best use of capital, you could probably find a better use.
But again, we're not up, I don't like they're not operating in a vacuum, right? They've set
the precedent that this is what this money will be used for. So perhaps, you know, from future business lines, revenue from those, you know, maybe it then gets put to other uses or things like that.
But yeah, I don't know.
Because I do think a lot of teams use them as an excuse to slow rug in the fact that like they'll be like, we had buybacks, we did all we could, GG's, like it didn't work out.
we had buybacks, we did all we could, GG's, like it didn't work out. To Jason's point,
like there is a certain extent where, you know, things like hyper liquid, where it's much more
automated, and then it's not like all of their money. Yeah, I think it can be really good. But
like, if you're just thinking that you turn a buybacks switch on, and suddenly there's demand
for your token, when the underlying business principles haven't changed at all, then like,
you're just going to be foolish, and it's just going to be a news trade. And I think we've seen that time and time again.
In the past year, you know, teams turn a fee switch on, teams turn a buyback switch on and like,
okay, cool. You still have the same inflation. You still have like,
no token holder rights. Your token still has no use. So it's like, you're buying back something
worthless and like people are going to, you know, long it for a quick 10% scalp or whatever. And and it's just gonna go straight back down to where it was um and at that point you're just
wasting money and you'd be better sure putting your capital elsewhere um yeah it really is
we've also seen some projects do pretty insane buybacks but um and then you take a look at the
chart and you just question yourself like if if uh a certain project's buying, like, a lot of these tokens back, why isn't it reflected on the chart?
I mean, it is a pretty good, like, way to market your token as well, right?
Like, you buy back, I don't know, a couple mil every day, but you're masking bigger sales of, like, five to six mil per day. So, you know, buybacks are like what Jason and Altair said,
you know, good for some cases, but on a, on a general broad based basis,
I think the capital could be spent, you know, doing other things like improving
your customer acquisition. You could, you could ramp up your, your business lines,
but you know, it's not a end allall be-all to all projects and um yeah mainly
um to marcus's point that like you gotta look at inflation too like a lot of these these coins these
these dow tokens and whatnot they basically pay for the the salaries of a lot of the employees
and whatnot so it's like the inflation can basically just be more than than the buybacks
are and then you're just like,
they're dumping on themselves basically to get, to get money. And I think like,
you just have to be really careful about that kind of stuff.
Yeah. I think you, I mean, we got to see through like, what is the buybacks actually meaningful or not firstly? Cause I mean, everybody loves the whole concept of buybacks, right? It shows that
like, Oh, from a crypto user perspective, oh, the team's buying back their
tokens, you know, they must be pretty confident about the business model, et cetera, et cetera.
But it could easily also be just a way to mask like, hey, we're buying back this amount,
but what if the selling amount is just way more than what we're buying back, right?
So it totally just negates that.
Yeah, I think 2025 specifically is just, there's been a lot of like conversation about like, oh, you know, what, what rights do token holders have?
Like, how do, you know, how do like, you know, how do token holders like benefit from like the protocol?
Right. And like, I think we're starting to like see, you know, like these sort see these conversations come up more.
You have projects like MetaDAO out right now trying to pioneer a lot of stuff.
So I just think this conversation about token holder rights,
whether we should do things for buybacks, growth,
I think it's just an interesting conversation to have.
So thank you for that.
Okay, so last, actually, no, we should be able to,
I guess I can ask two more questions. So in the past, and I guess this sort of touches about like
what we just talked about previously, like in the past, like you used to be able to just like buy a
basket of coins and like wait, right? Like, like like wait on your laurels like this stuff like might go up right like all of it might go up but you argue in 2026 that this is
like crypto has sort of become like a stock pickers market um like for 2026 like what are you like
looking for specifically like if if people like had to like oh you know be very careful about what they're buying, what are you looking for in this type of situation?
Mike, I can go first.
I think what we've highlighted in the report is that this year, like we talked about today on this call too, this is the institutional year.
We haven't really seen retail interest
peak yet the last time we ever had retail interest was the meme coin mania before that nft season
and we we really know like how these um these uh retail has performed since these last two trends
so coming to 2026 um i think our team is in a view that the tokens that are going to be
bidded would be from an institutional lens as well.
So the way I see it is we got to first identify like what would, I think as of
So first touch point of entry for capital would always be Bitcoin and then followed
by the next biggest ETF out there, which is ETH and then Solana.
So in my view, the majors are going to be the direct beneficiaries of these fresh inflows
of capital.
And then once capital comes in again, then it's all about where these money's gonna flow to
once capital touching these majors.
I do think, you touched on MetaDAO for a little bit there,
and I do think coming to 2026,
we're gonna see a lot more of these projects
come out of MetaDAO type raises
where there is an incentive for the teams to actually
prove that they can build and they're willing to deliver.
And we touched on token unlocks and big dumping from VCs, hedge funds, whatever.
I think this is a pretty good narrative into 2026 as well, because it aligns the token holders who
get in pretty early. And you do remove the kind of like vicious cell pressure from the VCs and
stuff. So yeah. Thanks. Thanks for that. Okay. And then I think we have like one more question, and then I just called for the day. So without naming's a bit of like a loss in like belief right now of everything else outperforming instead but
like what what what do you think like what do you think people are overlooking right now that could
be like that could really grow in 2026 sector wise i mean i i'll defer to LTR maybe a little bit on this, but like for me, and I actually said this in our, at our retreat in Montenegro, maybe it's in one of our media things, but like, you know, credit is a fundamental like underpinning of financial markets.
pinning of financial markets.
And I wrote a, like, one of my, like, I don't use, I don't, you know,
I'm not a big Twitter, you know, lover, but one of my better posts on Twitter
was kind of talking about, like, you know, the big difference between this cycle
and last cycle is there's just no real institutional-sized credit, you know,
given out in crypto this cycle relative to prior cycles, right?
In the, you know, 2020-21-22 cycle, you had guys like, you know, Galaxy with, you know,
15-20 billion dollar loan books on their own and they were, you know, like one third or even less
of the total outstanding loans loans right you had huge
crypto like hedge funds speculating taking out credit you know bidding up things um right like
the whole like dynamic around credit today is like a you know a shadow of what it was in
in uh in prior cycles and like it's you know probably thing, a lot of what was done in that cycle with respect
to under collateralized lending and things like that was definitely not best practices and exposed
a lot of the reasons why centralized lending can be so dangerous and why DeFi and things like that
are actually very viable alternatives. But but regardless of that revelation it still is true that credit today is so so so
much less than it was uh in prior cycles which is you know siphoned out a bid that would flow
through to these all coins like we saw so like um credit and and things like that is something that I think a lot of people are still sleeping on. They're still like very PTSD, rightfully so, from all of the credit related blow ups of last cycle. And I think some of the like very interesting and like useful things to come out of credit and DeFi, like 3Jane, I know you said don't mention a token. I don't even think they have a token. Maybe they do.
of credit and defy like three jane i know you said don't mention a token i don't even think
they have a token maybe they do um but like just stuff like that it's just very cool it's useful
it's actually innovative using the tech that crypto is built in a delivering a useful product
to people like i've actually used three jane right to test it i've used it i've had you know family
members try it out like people like actually wow this is actually like cool product so like i think that is an area that i'm like very interested in that i think other people
aren't as you know interested in because of all the things i said and um yeah i'm not sure i'd
have like a great i don't actually have a way to get exposure to it that i am in love with but i'm
on the lookout for it.
Anyone else want to chime in on that?
Anything you guys are looking at into 2026?
I think
DeFi is going to be very big.
To echo LTR's point,
over the past
week, we've seen the CFTC
and the SEC working together to
tokenize Wall Street right we're going to bring stocks on chain bonds RWA what I really like to
see coming to 2026 is an explosion in DeFi perhaps even you know tokenized lending of these equities
or stocks right fractional lending that occurs on the
stock market that I think could happen now on chain. And we've also seen like really good push
from Washington, right? We're going to have the market structure bill finalized hopefully by end
of year this year on Trump's desk for him to sign. At the moment, it's not looking very likely, but
you know, I think Trump has made it pretty clear that once the bill gets to his desk, he's going to sign it right away.
So legally, from this standpoint, it's opening up a lot of doors for DeFi to explode coming in 2026.
And we talk about the institutional bid.
We've seen a lot of talk around lately about earnings and price to sales price earnings ratios.
I do think it's easier for these institutions to look at something like Aave and then look
at the fees they generate, how much TVL they have, and then price something like that more
efficiently versus something like an L1, right?
Where it's a little more debatable on how you should price something like that.
So yeah, DeFi could easily see a ranathons, stuff like Aave, and even the new ones, right?
Like Avicii that recently just launched that is trying to be a new bank.
So I do think there's a lot of space and there's going to be a lot of innovation in this space.
And with innovation, TVL and the stickiness of it should come as well.
LTR, did you want to, I know you were trying to chime in earlier.
Yeah, we've been going a long time.
I was just going to say like one thing I think is just going to continue to grow is anything that's an aggregation layer.
One of the things I said in the report
is about aggregation layers and thinking about them more abstract. And what I mean by that is
like media is an aggregation layer. Threadguy is an aggregation layer. And I think as we see more
and more corporate chains, as we see more and more, you know, neobanks and everything, I think
really where the value is going to accrue is things that can aggregate that efficiently,
whether that's things like FOMO that are like all-in-one trading apps,
or whether that's things like media, like Threadguy, who, you know, you can get a LE5 from
or a TLDR pretty quickly. I'm looking for things like that. Like, you know, what's going to be the
app store of crypto or what's going to be those types of things. And I think like going into
2026, when things might be more fragmented um i think we're going to create solutions that are going to be pretty valuable thank you um and that's a great segue because we
are so we have our markets report are out right now um and then next week we also have our apps
report coming out on the 15th if i'm if i'm. And then the info report also coming out on the 17th, which also goes into
like a bit about, you know, aggregation and super apps. So we can look for, you can look forward to
that as well. Okay. I think we are good on time. I really appreciate you guys for coming on to talk
about this. We should be hosting like another spaces like next week as well like once these reports
come out and just a quick plug we do have a promo sale right now for these three reports
um it's gonna be 89 for all three and then you could also get two months of two months of delphi
pro for free as well so um i think it's a really good deal. But if you want to check out the
reports, you can check them out there. Alrighty. Thank you very much, everyone who came to listen
and speak. I hope you have a wonderful day. Expect us next week. All right. Thank you, everyone.
All right. Thank you, everyone.
Thanks.
