A tale of two crypto camps
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The world is wrestling with Trump's on-and-off tariffs and their attendant side effects such as retaliatory tariffs, whipsawing markets, and what appears to be trouble in the U.S.'s sovereign bond market. The speed with which this is all happening is dizzying, and makes commenting on it feel futile. A day later the world can look very different
So instead, I'm going to write about a slower-moving trend I've noticed the past couple of months: As large swaths of crypto increasingly come to resemble Sodom and Gomorrah, traditional financial institutions are embracing crypto, and it seems for the right reasons.
Traditional finance institutions, historically cautious or even dismissive of crypto, are championing foundational crypto ideals—decentralization, transparency, and immutability—while many newer crypto enthusiasts, those entering post-2020, have largely abandoned these very principles in favor of pure speculation and profit-driven motives.
Institutional figureheads now regularly extol crypto's revolutionary qualities. They stress the benefits of decentralization to improve security, transparency to foster trust, and immutability to protect against fraud. This rhetoric aligns them closer to the OG crypto userbase than today's typical crypto participant.
Take for example Blackrock's Head of Digital Assets Robbie Mitchnick who recently said at the Digital Asset Summit about why Blackrock started with Ethereum for BUIDL, a tokenized money market fund.
"There was no question that the blockchain we would start our tokenization on would be Ethereum and that's not just a BlackRock thing. That's the natural default answer. That's really important… Clients have clearly made the choice that they really do value decentralization, credibility, and security. And that is a great advantage that Ethereum continues to have."
Conversely, it seems to me that most recent crypto entrants are defined primarily by their skepticism and speculative appetite. A kind of crypto nihilism. There are of course many reasons for this, but one certainly comes from a string of failures, or perceived failures, within the crypto industry. Setting aside the world-class fraudsters like SBF, Richard Heart, and Do Kwon, even good decentralized projects have had troubles.
Ethereum is probably the most well-known one. In 2016, a vulnerability in The DAO, an early decentralized investment fund, allowed an attacker to drain around $60 million worth of ETH. In response, the Ethereum community, led by Vitalik Buterin, voted to execute a controversial hard fork to reverse the hack and return the funds. Essentially, they rolled back the chain, immutability be damned.
Many other decentralized projects have struggled to deliver on their decentralization promises. MakerDAO's decentralized DAI stablecoin became largely backed by centralized stablecoins after the March 2020 market puke, undermining its claims to censorship resistance. Layer-2 solutions often function as glorified multi-signature wallets, where a handful of individuals retain control. Solana's repeated network halts and manual restarts have challenged the credibility of its decentralization claims. More recently, Hyperliquid delisted a token at a price far below the current market price after an attacker attempted to exploit an illiquid market on the exchange. All of this ostensibly makes it seem like crypto boasts of decentralization while in reality not caring about it.
This shift in crypto culture is also massively influenced by broader shifts in sentiment. Faced with economic disenchantment, widespread institutional mistrust, and deep financial insecurity, young people increasingly see stock trading, real estate, and crypto as a means to escape what appears to be a rigged system. From this perspective, foundational crypto ideals such as immutability can seem naïve or even irrelevant.
On the other hand, traditional financial institutions entering crypto come from a completely different vantage point. First of all, they don't have a get-rich-quick attitude–they're already filthy rich. They are looking for and investing in crypto projects that will be value-creating, not extractive.
Second, they've got a low time preference, meaning they measure investments in years and decades. On that timescale you can see crypto is real innovation promising substantial practical benefits. They don't get frustrated by the seeming lack of progress in the past couple of years, because they can see the tremendous progress made in 16 years.
Third, these institutions are more pragmatic. They understand that decentralization can take time to achieve, look at the decentralization progress of Ethereum since the hard fork, Solana's much improved validator set, and the fact that Hyperliquid is already more transparent than any centralized exchange.
Thus institutions now sound more enthusiastic about the technology than most people on Crypto Twitter (CT). This doesn't mean I'm an advocate for institutions in crypto, because I'm very wary of them. Nor does this mean I immediately believe what the Larry Finks of finance say about crypto. Who knows if they actually believe what they're saying, but at the very least I'm glad that some important camp within crypto is still championing crypto virtues.
-David Sencil
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GAIMIN's Q1 2025 Recap - A Pivotal Start to the Year GAIMIN's Q1 2025 saw major growth in gaming, AI, and cloud computing. Key highlights include the product launch of GAIMIN Smart Wallet, GME Pro, and AI expansion with the Qwen 7B model. The GMRX token anniversary saw liquidity upgrades and giveaways. Nökkvi Dan Ellidason became CEO, and GAIMIN joined Unicorn Factory's Scaling Up Program. Partnerships expanded across gaming, Web3, and AI, while GAIMIN was featured in major media. More ahead in Q2! | Schiff Urges China to Crash Dollar, Buy Gold Amid Trade War Peter Schiff has suggested that China resolve its trade deficit with the U.S. by dumping its U.S. Treasuries and dollars… read more. Editor's comment: Schiff's argument seems to indicate that China's Yuan should replace the US as reserve currency. This doesn't take into account key fundamental considerations like the fact that a surplus nation such as China, the largest in history, can't both be an overwhelming net exporter and also the reserve currency. Ray Dalio Warns of a Once-in-a-Lifetime Global Meltdown Masked by Tariff Distraction Ray Dalio warns global markets are sleepwalking into a once-in-a-generation collapse driven by debt, division… read more. Editor's comment: I've found that the more level-headed takes from the U.S. tariff fallout have largely landed on many of the themes Dalio speaks to in this piece. Bitcoin Set to Go 'Nuclear' as Governments Flood the World With Fiat, Says Strike CEO The trade war initiated by Trump has rattled global markets, and Jack Mallers, the CEO of Strike, posits that bitcoin… read more. Editor's comment: While America might not be ready to print money, it appears the EU and China are on the cusp to print a lot of new money. US Inflation Rate Plummets to 2.4% Amid Tariff Pause The U.S. inflation rate notably slipped in March, bringing the 12-month inflation rate down to 2.4% from its February standing… read more. Editor's comment: Lower inflation rates gives the Fed more cover to lower interest rates. All eyes are on May's FOMC meeting! Massive Win for Crypto: Trump Crushes IRS Rule Threatening DeFi Survival Trump just obliterated the IRS's controversial DeFi reporting mandate, turbocharging crypto innovation and slamming… read more.
Editor's comment: The IRS rule is finally done. Expect changes for defi tokens soon.
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