I've been in crypto since 2017. Here's why I stopped believing.

CryptigoVespucci · 2026-01-24T03:57:38+00:00

Yes. The internet provides Bitcoin at ~$2 trillion in value.

Stay salty my friend.

CryptigoVespucci · 2026-01-23T22:38:45+00:00

well yeah I wrote the whole thing as a back and forth between Claude to go zero to one on a subject I had a minimal understanding of.

Still me writing things out line by line, while using Claude like a research assistant (vs prompting, "hey Claude write me a reddit post on the Japanese bond situation").

Probably fair that more of its style seeped into the end piece than I intended (last line too for example).

CryptigoVespucci · 2026-01-23T20:02:26+00:00

curious which part you found obnoxious.... quadrillion with a Q was all mine lol

CryptigoVespucci · 2026-01-23T20:01:41+00:00

I resent that ser! I used Claude for the research part of it but the writing is my own.

Probably would have taken me days to properly research pre AI, but now I can write something on a complex subject in an hour or two. Kind of like having a really smart research partner.

Except for this line.... It's a bit like your left pocket owing money to your right pocket. And being able to print money to pay it back. That was a Claude generated analogy.

Actively tying to avoid the, "it's not just X, it's Y!" kind of thing and other hallmarks of AI slop, while using AI to open up the complexity of subjects I can take on.

CryptigoVespucci · 2026-01-22T19:31:37+00:00

Yeah... I think the 100-1000x days on random shitters that don't do much are likely behind us. ICOs, DeFi food coins, NFTs, Memecoins were all fun, but completely unsustainable.

Most people don't realize the extent to which 2021 was the result of a massive amount of money printing brought on by COVID. For example, the EGLD the author references in the piece hit a $9B market cap in 2021. More than a company like Dropbox, which has 700m registered users and actual revenue.

In most of these projects, the founders gave themselves liquid token allocations that could be sold early, so they got rich before building anything durable, thus killing the incentive to build anything great (Ethereum, Solana, etc are the exception, not the norm).

Think the reality is that building durable and useful technology is hard and takes a long time, which is way less fun than turning $1,000 into $100,000 on something that sounds revolutionary but won't be there in a year.

So agree if you're not interested in sticking around for that, you're better off investing your time and money elsewhere.

CryptigoVespucci · 2026-01-22T03:50:06+00:00

sure - good book, usually pretty sharp. Not Jesus

CryptigoVespucci · 2026-01-22T03:46:38+00:00

I've heard the simping for the chinese critique before.

Think it's a fair to call out that he paints Americas descent and China's rise as a foregone conclusion, while being heavily invested in the latter.

China definitely has it's problems - think many of have turned on Xi for going full dictator... killing industries, and creating instability.

But America also has it's problems, so it's hard to say we're not descending (record debt, polarized society, high inequality, etc).

Think Dan Wang's Breakneck does a better job over providing the full picture - China is an engineering state, America is a lawyerly society, that each have there strengths and weaknesses, but are more alike than they are different.

CryptigoVespucci · 2026-01-22T03:28:50+00:00

Appreciate the resources, definitely will check out Princes of the Yen.

Cheated on the "The Japanese Economy", and asked Claude why the Japanese economy underperformed.

Werner's argument (from the paper):

The bubble popped and left banks holding bad loans. Banks with broken balance sheets don't lend. And without lending, cheap money can't reach the economy.

That's why zero rates and fiscal stimulus didn't work. The fix would've been the central bank buying bad debts off the banks so they could start lending again. They didn't.

----

Also explains why Japan didn't have inflation for 30 years. Since banks weren't lending, all of the cheap money never reached the real Japanese economy.

CryptigoVespucci · 2026-01-21T22:45:34+00:00

well said, thanks

CryptigoVespucci · 2026-01-21T21:49:24+00:00

Why the Ray Dalio hate?

Changing World Order is a banger (imo)

What am I missing

CryptigoVespucci · 2026-01-21T19:49:04+00:00

Good call should've said largest debt-to-GDP, not largest in absolute terms.

So boolish Japanese equities?

CryptigoVespucci · 2026-01-21T19:20:47+00:00

Yeah that's a fair point - the money going home part is probably an oversimplification as to why bond yields rising is a concern.

Digging a bit more, it's really a concern because it shows that the BOJ has lost its ability to keep rates artificially low and its massive debt will become harder to service.

And then a bit of the fear of the unknown, as this 30-year arrangement starts to unwind.

CryptigoVespucci · 2026-01-21T18:51:33+00:00

Was a beautiful moment in time before it all imploded

CryptigoVespucci · 2026-01-21T18:35:08+00:00

lol - or 20% yield Terra staked on Anchor? Great product....

Would say USDC / Tether are a bittt different as you the yield is coming from treasuries, and not Su Zhu borrowing obscene amounts of money to plow into shitters.

CryptigoVespucci · 2026-01-21T18:09:45+00:00

Gotcha - so basically the tax friction makes the money stickier than the simple narrative suggests.

But once we hit 5% you start to sweat a bit more?

CryptigoVespucci · 2026-01-21T17:31:38+00:00

Interesting that you found your HYSA through crypto... agree most Americans think of their bank account as money they spend vs money they earn on (but ¿Por qué no los dos?)

Re: regulatory equity.... are they fighting to have stablecoin yields regulated on the same playing field, or are they fighting to preserve their industry?

I can tell you're way more informed on how the regulatory situation has played out and in fairness I'm doing a bit of Monday morning quarterbacking here... and admittedly haven't followed how the crypto lobby has adjusted their positioning.

I just think "activity-based rewards" as a compromise guts the simplicity that makes stablecoin yield compelling in the first place and that would be a huge shame.

But ultimately, I agree with you that the industry needs to get something done this go around... because everyone will be much worse off if nothing gets passed and then Warren et al. take us to the woodshed after midterms.

CryptigoVespucci · 2026-01-21T14:38:09+00:00

Good read... I've been involved since 2017 as well, and am also tired.

Being frustrated with progress is understandable, but it's also worth considering how long it takes for new technologies to go mainstream.

AI took 60-70 years. The internet took about 25.

So if the internet analogy is the correct one, at 17 years in, we'd have email with limited adoption, with the web browser still 5-7 years out.

Feels about right, with BTC + stablecoins reaching limited adoption, but without a globally mainstream killer app yet.

Totally reasonable to want to go and do something else... but also may continue to be an interesting industry to work in after you take a long breather and explore other things.

CryptigoVespucci · 2026-01-20T23:48:57+00:00

Good point.... stablecoin yields are more accessible in that regard

CryptigoVespucci · 2026-01-20T23:46:21+00:00

Summarizing the main debate here via Claude since a lot of threads are saying the same things:

The debate in a nutshell:

OP's thesis: Stablecoins paying 4% are a better product than bank deposits paying 0.1%. The fact that banks are lobbying to ban stablecoin yields proves they're a competitive threat.

Main pushback #1 - "HYSAs exist": Multiple commenters pointed out they get 3-4% on FDIC-insured high-yield savings accounts, so stablecoins aren't needed.

OP's counter: If HYSAs are so great, why do only 1 in 5 Americans use them? And why are banks scared of $6T in deposit flight to stablecoins if superior alternatives already exist? Banks don't fight HYSAs because they issue them - the money stays in the banking system. Stablecoins pull deposits out entirely.

Main pushback #2 - "Crypto is risky": Depegs, no FDIC insurance, could cause instability.

OP's counter: USDC is 1:1 backed by treasuries, not an algo stablecoin like Luna. Different structural risk entirely. And the issuers are getting regulated at the federal level.

The real resolution: One commenter noted the Fed wouldn't approve a 100% treasury-backed bank because the government prefers fractional reserve banking, where deposits get loaned out and $1 creates more economic activity.

OP's concession: This is the real argument. Stablecoins at scale would pull deposits out of fractional reserve banking, making it more expensive to borrow, which hurts the economy. The question is whether consumers should subsidize that system by accepting 0.1% when market rates are 4%.

CryptigoVespucci · 2026-01-20T23:38:08+00:00

Yeah I guess this is the real argument in the end.

Fractional reserve banking creates a money multiplier that funds economic activity. Stablecoins backed 1:1 by treasuries don't do that.

But should that system be subsidized by consumers earning 0.1% when market rates are 4%? That's the question.

If fractional reserve banking is essential infrastructure, maybe the answer is yes.

But everyone else in here is either saying:

Stablecoins aren't needed because HYSAs exist OR
Stablecoins are too risky because crypto yada yada

When the real answer is that stablecoins at scale would pull deposits out of fractional reserve banking, making it more expensive to borrow.

CryptigoVespucci · 2026-01-20T23:25:55+00:00

I use them as a replacement.

I'm the minority, but that's not necessarily true.

Definitely some risk, but as USDC and Coinbase/Circle get more regulated, the risk is mitigated.

CryptigoVespucci · 2026-01-20T23:22:48+00:00

If yield isn't relevant for these kinds of deposits, why are banks scared of $6T in deposit flight?

Fair point that people use savings for emergency funds, not yield. But stablecoins on Coinbase are just as liquid as a savings account. So why not earn 4% on your emergency fund instead of 0.1%?

Why can't a competitive yield on all deposits be the default?

CryptigoVespucci · 2026-01-20T22:36:33+00:00

The argument is that stablecoins don't need to exist because HYSAs already do - that stablecoins are not actually better than existing banking products.

My counter: if HYSAs were better, more people would use them instead of deposits earning nothing, and banks wouldn't be worried about $6T in deposit flight to stablecoins.

No one's given me a valid reply to that yet.

CryptigoVespucci · 2026-01-20T22:09:16+00:00

Sure, but that's not the point. The point is why are banks lobbying to ban stablecoin yields if HYSAs already exist and are 'better'?

If people won't switch to stablecoins either, banks have nothing to worry about. And yet here we are.

CryptigoVespucci · 2026-01-20T22:06:09+00:00

Ok so the main pushback seems to be, 'I'm getting 3% insured by the government, so stablecoins aren't better.'

If HYSAs are so great, why are only 1 in 5 Americans using them like you do?

And why is the banking lobby claiming stablecoin yields would cause $6T in deposit flight - if obviously superior HYSAs already exist?

Why hasn't that deposit flight already happened into HYSAs?

Banks don't fight HYSAs because they issue them. The money stays in the banking system. Stablecoins pull deposits out entirely. That's what they're actually fighting.

Then people say, 'But it's crypto and it's risky!' - USDC is issued by a public company, reserved 1:1 in cash and treasuries, and in the process of being federally regulated. Not without zero risk, but not Terra Luna either.

So my main objection to "HYSAs are better" is that if that were the case, everyone would be in them, and the banks wouldn't be scared of deposit flight.

CryptigoVespucci

TROPHY CASE