On May 21, 2026, the United Kingdom’s Financial Conduct Authority added Hyperliquid and the Hyper Foundation to its warning list, telling British consumers that the venue, its application, and its associated channels appeared to be offering financial services in the country without authorization. The notice sat quietly for two weeks before it surfaced and began circulating, and the response across crypto when it did became its own kind of data. $HYPE shrugged it off and held near its highs. The settled view formed within a day or two, holding that a consumer warning is routine paperwork every offshore venue collects on the way to legitimacy, the same notice Binance drew in 2021 before it compounded through two more cycles.

The warning itself deserves the shrug. It carries no finding of fraud and breaks no new ground, so a single consumer notice changes very little on its own. At the same time, a shrug can cost you dearly….

In the weeks around the FCA notice, the most powerful names in regulated markets converged on Hyperliquid at once. In mid-May, Intercontinental Exchange and CME Group, the operators of the New York Stock Exchange and the Chicago Mercantile Exchange, pressed United States regulators to rein the venue in, warning the CFTC that its anonymous perpetual markets opened room for manipulation and sanctions evasion across oil and energy trading. Two weeks later, ICE chair Jeffrey Sprecher stood on stage at a Bernstein conference, called the eleven-person exchange bigger than Nasdaq, said his company had met the Hyperliquid team several times, and described the relationship as two firms learning from each other. Grayscale named the platform the breakout success story of modern crypto and launched a Hyperliquid staking product in early June. By May 20, the venue had booked roughly 255 million dollars in revenue for the year. The bulls read that sequence as the establishment opening its arms, and their bags becoming heavier by the quarter.

Read the same sequence for what each party is doing, and a different shape appears. Sprecher’s pitch to regulators asks for one of two things: permission for the regulated exchanges to offer the identical product, or a decision to fold the on-chain version into the swaps regime under Dodd-Frank, EMIR in Europe, and the equivalents in Japan. Both of those roads close the open ground Hyperliquid currently occupies, since one floods the venue with licensed competitors and the other drags it under the registration and surveillance rules it has so far lived outside. Around the same time, ICE launched its own Brent and WTI perpetual futures through OKX. The institutions now praising Hyperliquid are the same ones that had already asked United States regulators to crack down on it.

The one prominent figure reading the FCA notice as a beginning is Kyle Samani, who co-founded Multicoin Capital and stepped away from the firm in February. He answered the listing in two words, calling it the first of many, and he has spent the months since his departure arguing that Hyperliquid embodies most of what has gone wrong in crypto, questioning its closed code and its permissioned validators and doubting aloud that it survives contact with serious regulation. A former insider forecasting more enforcement is exactly the signal a market trains itself to wave through, since it arrives wrapped in personal grievance and stays easy to discount on those grounds.

Set the institutional noise aside and look at the legal exposure directly, since that is where the warning actually lives. Risk for a venue built this way arrives as a ladder, and every rung on it has already been climbed by a more senior operator.

The first rung is the licensing question, and the FCA has its foot on it. Running an unregistered venue that serves users inside regulated markets is the oldest exposure in the business, and one consumer warning is the polite opening line of that conversation. The cost looks small on its own, and it compounds as the notices accumulate, because warnings travel. A single regulator’s notice becomes a template that its peers copy, and a venue can find itself named on five lists by year end without one charge ever being filed.

The second rung is anti-money-laundering law, and here the precedent has a name. BitMEX built the dominant offshore derivatives venue of the last cycle, told the world it kept American users out, and learned that the Department of Justice will treat those controls as theater the moment it sees how easily they were crossed. The founders pleaded guilty to Bank Secrecy Act violations. The lesson that outlived the case is the one the angriest replies under every Hyperliquid thread keep hammering and keep landing: a decentralization label has never once persuaded a prosecutor to treat the people who built and ran a venue as anything other than its operators.

The third rung is geofencing, the first defense Hyperliquid’s supporters reach for and the weakest one they have. A block that anyone can beat with a VPN actually helps the prosecutor, because it shows the operator knew which users to keep out and chose a barrier it knew would not hold. BitMEX learned that a visible gesture of compliance can deepen the exposure, because the gesture itself establishes knowledge, and a venue that geofences badly has filed a written record of its own awareness of the line it stands on.

The fourth rung is the one almost no HL bull has priced, and it oozes in the collateral. Hyperliquid settles in USDC, a stablecoin issued by a regulated American company that holds the technical power to freeze any address it is instructed to freeze. That power has been used. In August 2022, within hours of the Treasury sanctioning the Tornado Cash addresses, Circle froze the USDC sitting inside them. A perpetual futures venue whose entire margin system clears in a centrally controllable dollar carries a single point of failure that no quantity of on-chain decentralization can reach, and the manipulation and sanctions-evasion worries that the CME and ICE carried to the CFTC are the precise predicate a regulator would cite on the day it chose to pull that lever. The most decentralized order book in the world is renting its base money from a company with a compliance department and a phone number.

Stack the four rungs, and the position the bulls actually hold comes into focus. The revenue, the volume, the bigger-than-Nasdaq line, and the Grayscale product all measure one thing, which is size, and size is the threshold at which regulators and incumbents stop leaving a venue alone. You do not get named in a complaint to the CFTC by the two largest derivatives operators on earth because you sit beneath their notice. The market is treating the arrival of that attention as a milestone of acceptance, and the same attention is the mechanism through which the exposure on all four rungs eventually gets enforced. A token that celebrates its own growth here is celebrating the thing that summons the regulator.

Set Hyperliquid’s position beside ASTER, and the asymmetry stops hiding. ASTER sits inside Binance’s orbit, the venue CZ has championed as the house answer to Hyperliquid, and CZ brings to it the single most valuable credential anyone could hold in this particular argument, which is that he has already lived through the enforcement Hyperliquid has only begun to attract.

In November 2023, Binance settled with the Department of Justice, the CFTC, FinCEN, and the Treasury’s OFAC for roughly 4.3 billion dollars, and CZ pleaded guilty to a single count of failing to maintain an effective anti-money-laundering program, stepped down as chief executive, and in April 2024 received a four-month federal prison sentence that he served in full. The firm kept operating the entire time, held its place as the largest venue in the market, and went on compounding. CZ walked back out having paid, in money and in liberty, for the most expensive legal education anyone in this business holds.

It’s simply not priced in. The Hyperliquid founders stand at the front of their enforcement story, having built something enormous before ever sitting across from the agency that decides what enormous things owe or what they need to abide bye, which leaves almost the entire legal cost ahead of them and almost none of it discovered. CZ stands at the far end of his. He has met every agency that matters, lost to them, paid them, and learned where each line runs by crossing it and being manhandled back across. Assuming CZ has survived the worst the system can hand down, means he knows the terrain of that system better than any consultant on a retainer. The protection that knowledge confers is the one form of legal insurance nobody can buy once the loss has already landed.

ASTER is the higher-torque expression of a bet on that knowledge, and BNB is the same bet held closer to the core. Both sit behind a chad who found the lines the hard way and stands today on the correct side of all of them. That is the whole reason the refrain keeps holding. CZ does not lose.

The asymmetric position rarely feels comfortable at the moment of entry, because it lives wherever the crowd has misjudged which fact carries the danger and which fact carries the cover. Today the crowd reads Hyperliquid’s institutional attention as a shield and treats CZ’s prison record (and fudded reputation) as a stain. You can bet on Jeff or you can bet on CZ. Betting on Jeff is betting that the reckoning still ahead of him never comes, while betting on CZ is betting on the one founder who has already met it, paid it, and kept buidling.

Polymarket spent five years building the most permissive prediction-market platform in crypto, and the last six months watching that permissiveness get dismantled jurisdiction by jurisdiction. The story is worth holding in mind right now because the same regulatory wave that swept Polymarket is going to wash through every DEX that has built its user base on the open-global model, and the projects that survive that wave will be the ones positioned ahead of it, with structural protection that the loud venues currently riding the cycle do not have. AKA, the ones that are backed by the supreme leader, our beloved big cousin, CZ.

The Polymarket Year

Polymarket paid the CFTC $1.4 million in 2022 for operating an unregistered derivatives exchange, then spent the next three years building a US-compliant arm by acquiring the CFTC-licensed QCEX exchange and relaunching for US users in late 2025 under an invite-only waitlist. The international side of the business kept running on the older open model until 2026 happened. Spain ordered ISPs to block Polymarket and Kalshi. Indonesia, France, Brazil, India, Australia, and the UK each issued their own restrictions or bans. Nevada filed a civil complaint and Tennessee issued shutdown orders in the same week of January. Massachusetts ruled in court that prediction market contracts function as illegal sports wagering under state law. The list now sits at over thirty countries with full or partial restrictions, and the platform has responded by implementing aggressive VPN blocks, IP-based geofencing, and tighter identity verification across its international footprint.

The shift from “open and global” to “compliant and restricted” happened in months rather than years. Users who had been trading without friction for years suddenly found themselves locked out or pushed through KYC. The Polymarket token, separate from the platform itself, has spent 2026 absorbing the price impact of every new jurisdiction that closed its doors. The pattern is the regulatory equivalent of a slow-motion liquidation, and it is not finished.

Hyperliquid Is The Next Domino The Market Has Not Priced

Hyperliquid is the venue most likely to take the next major regulatory hit, and the market has not yet absorbed how exposed it is. The platform restricted US users from day one through its terms of service, which is often cited as a defensive posture, but the depth of the restriction is shallower than retail observers assume. Hyperliquid does not run KYC, which means the geographic enforcement relies on IP blocks and user attestations that any motivated trader can route around with a VPN. The platform’s own traffic data shows that 22.59 percent of its user base sits in the United States, which is the largest single country source by a wide margin. That is the same structural problem that produced the CFTC settlement for Polymarket in 2022, dressed in a different jurisdiction-of-origin claim.

In May 2026, CME Group and ICE sent formal letters to the CFTC and Congress requesting an investigation into Hyperliquid over manipulation risk and potential sanctions evasion. Bloomberg covered the letters as a serious regulatory escalation. Hyperliquid responded by establishing a $29 million Washington policy operation to lobby for a US perps framework, which is the kind of defensive spending that a platform commits to when its founder rather not go to jail.

HYPE has been moving (or rather “dumping”) in patterns that confirm the underlying instability. HYPE traded at an all-time high of $64.63 on May 26, 2026, after a 70 percent rally over the preceding ten days. Tokens that rally that fast tend to give back the gain on the same timeline. The token has scheduled supply unlocks ahead, with a $375 million unlock that hit in April 2026 and further unlocks structured into the emission schedule. The ETF flows that launched in May are real, and two ETFs of a single asset trading with daily volume swings of forty to fifty percent against their first-week baselines tells institutional allocators that they are looking at early-stage volatility rather than settled demand, and the allocator's response to early-stage volatility is to wait

Add the James Wynn liquidation cascade from May 2025, where he/him lost roughly $100 million on a publicly visible billion-dollar Bitcoin long, and the visible-order-book vulnerability that Wynn’s situation surfaced becomes the platform’s most cited structural weakness. CZ himself called for dark-pool style perpetual trading on DEXes after the Wynn incident, and the lack of order privacy on Hyperliquid was the specific problem he was pointing at. Eighteen months later, Hyperliquid still does not have a credible hidden-order solution in production.

The picture this assembles is of a platform that is dominant today, exposed structurally on multiple fronts, and operating in the eye of a regulatory storm that has not yet broken but is visible on the horizon. The market is pricing Hyperliquid as the consensus winner of the perp DEX category, and the structural facts complicate that pricing by reframing the asset as the consensus winner of a single competitive cycle rather than of the broader contest.

Why Aster Is The Cleaner Long-Term Position

Aster was built into the post-Polymarket regulatory environment from the start, and the design choices show the lesson having been learned. The terms of service include geographic restrictions and a no-circumvention clause from day one, which puts the project on the same formal footing as Hyperliquid. The actual protection runs deeper than the formal language though, and it sits in the structural position the project occupies inside the Binance network.

Aster came out of the Binance orbit by deliberate design. YZi Labs, which is the rebranded Binance Labs, backed the project from inception. The CEO, Leonard, came from a Binance background, and the broader team includes ex-Binance members. CZ personally bought $2 million of ASTER tokens in November 2025 and publicly endorsed the launch, comparing his own purchase to his early acquisition of BNB during the first Binance token generation event eight years earlier. Binance Wallet integrated Aster’s perpetual futures trading directly into its interface in January 2026, which means the largest distributed self-custody wallet in the Binance network now defaults its users into Aster perps without requiring them to leave the Binance product surface.

None of these connections are subtle, and none of them are accidental. What they produce is something Polymarket never had and Hyperliquid does not have, which is a project sitting inside the political and regulatory shadow of the largest exchange in crypto. Binance has spent the past three years building a US regulatory posture through its DOJ settlement and its ongoing compliance work, and the projects that share its network benefit from that posture indirectly. When a regulator considers action against an Aster-style venue inside the Binance network, the action is not against an isolated startup with no legal capacity. It is against a venue connected to an actor with significant lobbying resources, established legal counsel, and the kind of institutional weight that makes regulators think twice about which battles to pick.

The product side reinforces the structural advantage. Aster launched Hidden Orders eighteen days after CZ’s call for dark-pool DEX trading, becoming the first perpetual DEX to implement a credible cryptographic dark pool. That is the exact product that institutional traders need to move size without getting hunted on public order books, and it is the product Hyperliquid still does not have. Aster’s hidden-order architecture uses a commit-and-relay mechanism that conceals order intent until execution while still tapping the main liquidity book, which solves the institutional-flow problem without fragmenting liquidity into a separate venue.

The result is a project that is destined for the kind of capital that does not move into Hyperliquid because of the visibility problem, and that sits inside the political shadow of the actor most likely to win the regulatory contest of the next two years. But you need to be smart to see this.

The Holding Picture

The honest holding picture across the three platforms looks like this. Polymarket is the cautionary tale of a project that built on the wrong assumptions about regulatory tolerance and is now paying the cost. Hyperliquid is the loud consensus winner of the current cycle, with serious structural exposure to the regulatory and competitive pressure that the next two cycles will produce. Aster is the project positioned for the world that comes after the wave breaks, with the political backing, the product design, and the distribution surface to absorb the flow that the other two cannot hold.

The macro frame from the previous article in this publication still applies. CZ does not lose, and the projects he has staked his return to active operation on are the ones he is prepared to fight for. Polymarket is an example of what transpires when there is nobody to fight for a project. Hyperliquid is the example of what happens when a project tries to fight alone. Aster is the example of what happens when the fight is structured before the regulatory pressure arrives, with the actor who decides these contests already standing inside the venue.

When the regulatory wave finishes washing through the DEX category, the venue that absorbs the flow is the venue that was positioned for it in advance.

That venue is Aster.

The most useful thing I have watched on quantum computing this year was a long-form conversation Isabel Foxen Duke recorded with Dan Boneh on her show Bitcoin Rails, running close to two hours, where Boneh, the Stanford cryptographer who co-authored the Google paper that re-estimated the resources required to break elliptic curve cryptography on a quantum machine, walked through how the field has shifted over the past two years and what the responsible posture for a long-term crypto holder now looks like. Boneh is not a crypto Twitter personality and he does not take positions on tokens. He is one of the people who actually built the field of modern cryptography over the past three decades, his name sits on the pairing-based schemes that most zero knowledge proofs depend on. The man knows his shit, so whether you are a bitcoin maxi in denial or n00b with an open mind, I recommend you watch, listen and read….

He has changed his mind, in the direction of taking it more seriously than he did two years ago, while still rejecting the panic that has become the default mode of the (Nic Carter) quantum conversation in retail crypto circles. The piece worth writing here is not the technical one explaining how the threat works, because Boneh and his colleagues have already written that piece better than anyone else will and I am redacted. The piece I find worth writing is the behavioural one, which is about how a holder of any long-hold position should think about a threat with the shape that quantum has, and what the predictable psychological failure modes are that produce bad outcomes for the people who get the response wrong.

What Boneh Actually Says

The short version of Boneh’s position is that quantum computing is real, the technology is making genuine progress, the timelines being thrown around by the panic camp are too aggressive, the timelines being thrown around by the dismissal camp are too relaxed, and the responsible posture for anyone holding crypto for the long term is to neither panic nor ignore. He puts the most aggressive credible scenario at “possible but unlikely before 2030,” he puts his own best estimate somewhere beyond 2035, and he refuses to commit to a specific date because the honest answer is that nobody knows. He compares the current moment to the years just before the Wright brothers’ first flight at Kitty Hawk, when the theory of flight was understood, the engineering challenges were real, the experts of the day publicly declared that human flight was impossible for a million years, and the actual answer turned out to be ten weeks. He thinks we have probably already had the equivalent of the Kitty Hawk moment for quantum, which is the Willow experiment Google ran in 2024 and a follow-up neutral atom experiment Caltech ran in June of this year. Both demonstrated that quantum error correction actually works at scales that matter, which is the technical bottleneck the dismissal camp has been pointing to for the past decade.

The reason this matters for a long-hold position is not that quantum will arrive on a specific date and break your wallet. The reason it matters is that the transition to post-quantum cryptography across the entire blockchain stack is going to take years, the panic will arrive much earlier than the actual technology does, and the price action will respond to the panic rather than to the technology. The actual danger to a long-hold position lives entirely on the holder side rather than on the technology side. The holder who sells into a panic that arrives five years before the underlying technology does loses to the panic itself, and the holder who dismisses the issue entirely loses to the transition when it starts happening.

The Two Failure Modes

The first failure mode is the panic seller. This is the holder who reads a Bloomberg headline about a quantum breakthrough, decides that the threat is now imminent, and unwinds a long-hold position into stablecoins at exactly the wrong moment in the cycle. The pattern is familiar from every previous existential narrative that has been attached to crypto over the past decade, from the China mining ban to the Mt Gox unwind to the FTX collapse to the SEC enforcement period. In each case, the narrative produced a wave of selling that turned out, in retrospect, to be the bottom of the cycle, and the holders who survived the wave by sitting through it ended up with the asymmetric outcome that the panic sellers handed them by leaving. The panic seller’s mistake is treating a distant probability as if it were an immediate certainty, and acting on the certainty rather than on the actual probability.

The second failure mode is the dismissal holder. This is the person who reads the same Bloomberg headline, decides that quantum is Star Trek technology, that will never arrive, has Adam Back notis on, and refuses to engage with the transition planning that is already happening at the protocol level. The dismissal holder’s mistake is the mirror image of the panic seller’s mistake, which is treating a distant probability as if it were a zero probability. The dismissal holder will be the one who is unprepared when the transition starts arriving in the form of protocol upgrades, address migrations, and wallet revocations that they have not done the work to understand. Their losses will not come from quantum at all, because quantum will not arrive in time to take their money from them. Their losses will come from the transition itself, through missed deadlines, ignored upgrades, and the morning they wake up to discover that their pre-quantum address has been deprecated and the assets in it are no longer recoverable through the standard channels.

Boneh’s argument, translated into investment language, is that both of these failure modes are predictable, both are common, and both are avoidable by adopting the response that sits between them. The response is to take the threat seriously enough to track the transition planning that protocols are doing, while not taking it so seriously that it changes the timing of a long-hold position that is based on entirely separate fundamentals.

What The Rational Holder Actually Does

The rational holder treats quantum the way a homeowner treats earthquake risk in a region with elevated seismic activity. The earthquake might arrive next year, it might arrive in fifty years, it might never arrive in any form that matters. The homeowner stays in the house and accepts the underlying risk, because the timeline is too long to justify moving and the alternative location carries its own costs. The homeowner also takes the small set of practical precautions that make the household resilient when the rare event eventually arrives, which is to bolt the foundation, maintain insurance, and keep enough cash and spam on hand to absorb a disruption when one comes. The rational response is to live in the house, hold the position, and do the small amount of preparation that makes the household resilient when the rare event eventually happens.

For a long-hold crypto position, the equivalent preparation is to hold assets in wallets that support deterministic seed-phrase derivation, to keep custody simple enough that a future migration can be executed without losing access, and to track the actual protocol-level work being done on post-quantum signatures rather than the panic-cycle commentary on social media. None of this preparation requires changing the position itself. None of it requires selling into a panic. None of it requires switching the thesis underlying the hold. It requires only that the holder remain attentive to the transition as it happens, in the same way that a sensible homeowner remains attentive to building codes without rebuilding the house every time the codes change.

The deeper point is that this is the same behavioural pattern that the previous articles in this publication have been advocating for entirely different reasons. The patience-as-job thesis from the Pabrai piece was about producing asymmetric returns by holding through the noise that pushes other participants out of their positions. The macro thesis from the Aster piece was about positioning ahead of a competitive response that will arrive over a timeline most participants are too impatient to wait through. The quantum thesis is the same shape. The threat arrives on a timeline that is long enough to favour the patient holder and is structurally set up to punish the impatient ones, because the panic will arrive before the technology does and the dismissal will leave the unprepared holder exposed to the transition when it actually starts.

TAO And The Long Hold

For a TAO position specifically, the quantum question is worth thinking about because the asset is held on a thesis that depends on a four-year halving cycle and a multi-cycle institutional repricing. That timeline overlaps with the most aggressive quantum scenarios but sits comfortably inside the more realistic ones, which means a holder who is positioned for the TAO thesis to pay out across the next two cycles is also positioned for the post-quantum transition to be substantially complete by the time the thesis fully matures. The cryptography securing Bittensor is the same family of primitives that secures Bitcoin and every other major blockchain, which means the transition path is the same path, the timeline is the same timeline, and the threat is not asymmetric to TAO relative to the broader market. The risk that quantum represents to TAO is the same risk it represents to every long-hold position in the asset class, and the response is the same response, which is to track the transition without letting the threat reshape a position whose underlying thesis has nothing to do with the cryptography.

The same logic applies to Bitcoin, to Ethereum, to every chain that uses elliptic curve signatures, and to every position that is meant to be held across multiple cycles. The quantum threat does not change the case for being in those positions. It only changes the case for being attentive to the transition work that the protocol teams are doing. A holder who confuses the two has either panicked too early or dismissed too thoroughly.

The threat that arrives slowly is the threat that the patient holder is positioned for, because the patient holder is already living on the timescale that matters, and the “nothing ever happpens” holder is already losing the cycle to the noise that the threat produces long before the threat itself arrives.

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Every argument about Ethereum’s value eventually collapses into the same uncomfortable fact, which is that the property crypto people admire most about the network, its openness and its credible neutrality, is the exact property that prevents it from holding a moat, since anything that anyone is free to copy without permission is by definition something nobody can defend, and the Ethereum Virtual Machine has been copied so many times by now that the list of chains running it reads like the ponzi yellow pages. ETH spent the early part of 2026 trading near nineteen hundred dollars in February while mainnet gas hovered around 0.04 gwei and drifting to roughly twenty-three hundred by mid-March, with the fee burn that was supposed to make the asset scarce gone quiet, which is the market telling you, in the only language it speaks, that activity and value capture have come apart. A moat that anyone can fork is not a moat at all, it is a gift the network keeps handing to its imitators.

A Moat You Can Fork Is Not A Moat

The mechanism that was meant to convert Ethereum’s success into ETH’s scarcity has been running backwards for two years, since the Dencun upgrade in early 2024 cut the cost of posting rollup data to the base layer by somewhere between fifty and ninety percent and effectively erased fee differentiation as a competitive edge, a windfall the rollups pocketed and a pay cut the mainnet absorbed, so the fee payments flowing from Layer 2 networks back to Ethereum fell by around ninety percent year over year while the chains doing the actual business kept the spread. There are now more than seventy active rollups holding north of forty-eight billion dollars, with Arbitrum and Base alone commanding roughly three quarters of the liquidity, yet the value those chains throw off accrues to their own treasuries and their own governance tokens rather than to the asset sitting underneath them, which is why one of the more honest assessments to surface from the Ethereum side this year conceded that the original purpose of Layer 2s no longer holds together and the network needs a different path. The bull case has quietly retreated from “ETH is money” to “ETH is foundational infrastructure,” and infrastructure that bills its tenants close to nothing is a charity.

The Whole Bull Case Is Now A Single Bet

Strip away the parts of the Ethereum thesis that have already been conceded and what remains is a single wager, which is that some external actor large enough to matter, a government building public payment rails, a bank with “real” infrastructure behind it, or the emerging machine economy where software agents transact with one another directly, chooses to settle on Ethereum and routes enough of that flow through the base layer to drag the asset along with it. The narrative has real anchors, since Ethereum still hosts roughly sixty-five percent of tokenised real-world assets at around twelve and a half billion dollars, with BlackRock’s tokenised money-market fund and a JPMorgan equivalent having launched there first, a US bank serving close to fifteen million customers put its own stablecoin on Ethereum this May, and the agentic-payment primitives that let autonomous software pay for what it consumes are being built as exactly the kind of programmable rails this future would run on. The trouble is that an investment thesis resting entirely on one future adoption event is fragile in a way its holders rarely price, because the decision belongs to someone else, and the alternatives are already in the room, with Visa having piloted Solana for precisely this kind of settlement and the same bank that chose Ethereum hedging by launching on Solana alongside it.

The deeper problem is the one that ought to keep a holder awake, which is that the network can win the bet while the asset still loses, since the activity those institutions and agents generate flows to the stablecoin issuers who collect the float, to the rollups where the transactions actually execute, and to the applications that own the users, with Layer 2 networks already carrying around ninety-five percent of Ethereum’s throughput and whatever reaches ETH itself a thin residue of the whole. You are being asked to bet on an outcome that, in the exact case where it arrives as promised, may still not pay you, which is the reasoning that pushed the most committed Ethereum advocate in the industry to walk away. David Hoffman, who co-founded Bankless and spent close to a decade as one of ETH’s loudest public champions, sold his entire position this month with the asset near two thousand dollars and a market capitalisation around two hundred and fifty billion, explaining that the “ETH is money” thesis had not failed so much as finished playing out, that Ethereum’s open, low-margin, rollup-heavy design keeps handing the upside to apps, Layer 2s, stablecoins, and tokenised assets rather than to the token beneath them. When the high priest leaves the church loudly and writes an essay explaining why, the eth maxis can’t help but assume he has lost his way, when the simpler reading is that he has detached himself from his own confirmation bias.

Liquidity Is The Only Network Effect That Survives Winter

The asset on the other side of this trade is BNB. It is the native token of the network Binance built, and where ETH leaks the value its own success creates, BNB is engineered to capture it, since the exchange routes a share of its profit straight back into the token through buy-and-burn. The business behind it does not loosen when the market turns. The exchange held around thirty-nine percent of global centralised volume in early 2026, ran combined daily spot and derivatives turnover above two hundred billion dollars, and cleared median daily spot volume roughly five times its nearest competitor. In the opening quarter it processed close to 4.9 trillion dollars in derivatives, near a third of all activity across the leading venues, with its closest pursuer trailing at under half its size. Liquidity is the only network effect in trading that compounds on itself, because traders go where the spreads are tightest and the book is deepest, and that pull obviously only intensifies in a downturn. In this case, bear markets empower the “supreme leader.”

The Flow Does Not Switch Off

The half of this thesis that turns a strong position into a permanent one is that the moat has stopped being confined to the exchange itself, since the same distribution that owns the centralised order book has begun reaching directly onto the chains through Aster, the perpetuals venue I broke down as the Binance counter-move, which now runs spot and perpetual markets across BNB Chain, Ethereum, Arbitrum and Solana and plants that liquidity gravity onto Ethereum’s own territory rather than surrendering it. Derivatives are where the real money in this industry lives, with first-quarter derivatives volume around 18.6 trillion dollars, close to ten times the size of the spot market, so the contest that decides everything is the contest for that flow, and a network that captures it on-chain while paying its own holders through a quarterly programme that retires a fifth of net profit in BNB is doing the precise thing Ethereum cannot, which is turning activity into scarcity for the people who hold the token. That makes BNB the base position and ASTER the sharper one, the same bet carrying more torque, since ASTER captures the new on-chain flow directly while BNB collects the profit that flow throws off. CZ bought two million dollars of ASTER with his own capital and compared the move openly to his early position in BNB. That’s not something “big cousin” sends about an asset he expects to fail.

The shape of the next two years is not hard to read if you watch the position instead of the noise. One asset is admired for an openness that guarantees it never keeps what it creates. Its entire case now rests on a single hope, that a government, a bank, or the machine economy picks it as the settlement layer, and even when one of them does, the token itself gets paid almost nothing. That is the exact realisation that emptied the most devoted holder in the space out of his bag.

The other asset is BNB, and behind it stands an operator who has watched every rival of the past decade end up absorbed, bankrupted, or quietly outflanked while he kept the network and the treasury he started with. Binance keeps taking the flow (ALL OF IT). It takes it through the exchange when the market is loud, and through Aster when the market moves on-chain, retiring its own supply the whole way down and the whole way back up. CZ does not lose. Which, in theory, means “you” can only win.

Hyperliquid has become the most credible structural threat to Binance’s derivatives business in the history of crypto, and CZ understands that better than the market currently does. HYPE traded at an all-time high of $64.63 on May 26, 2026, and the token now carries a market capitalisation of roughly $15 billion against BNB’s $88 billion, which puts Hyperliquid at close to eighteen percent of BNB’s circulating market value despite having existed as a publicly traded token for less than eighteen months, and the fully diluted valuation of roughly $59 billion shows what the market is pricing in once the remaining HYPE supply unlocks. The two spot HYPE ETFs that launched this month, the 21Shares THYP product on Nasdaq on May 12 and the Bitwise BHYP product on NYSE on May 15, with a Grayscale filing in active SEC dialogue and a third amendment submitted on May 22, mark the moment that institutional capital was formally given a regulated on-ramp to the perp DEX that has spent two years funneling derivatives flow away from centralised exchanges. That flow is the single most profitable line item in the Binance business model. The platform is doing roughly a billion dollars in annual revenue with an eleven-person team and an annual profit margin north of ninety percent, ninety-seven percent of which is routed into HYPE buybacks that have now pushed the token into a net deflationary phase. None of these numbers are speculative, they are operating results published in regulatory filings that the SEC has read and signed off on, and the implication of those numbers for Binance is that the on-chain derivatives market has become a primary front in the future of the exchange business.

CZ Does Not Lose

The pattern across every major confrontation in CZ’s career is that the entity opposing him eventually finds itself absorbed, bankrupted, or quietly outflanked while CZ retains the resources and the network he had before the fight began, which is the lesson available from the OKX rivalry, from the FTX collapse, from the Department of Justice settlement, and which is the lesson the market has not yet applied to the Hyperliquid situation. Hyperliquid is the most credible competitive threat that the Binance side of the market has faced since FTX in late 2022. The standard playbook of press releases and product announcements has been tried already as a response, and that comms play does not suffice against a venue that runs a billion dollars in annual revenue with eleven people. The serious response had to be the deliberate construction of an on-chain alternative inside the Binance network itself, a venue capable of capturing the same flow Hyperliquid is capturing while keeping it routed through the BNB Chain network that Binance still controls. That venue is Aster DEX, and it has been operating in the market since September 2025.

The macro thesis worth holding for the next twenty-four months sits in the simplest possible form. In a world where the most powerful single actor in crypto has decided that he does not want to lose this particular battle, the only available outcome over a long enough horizon is that he wins it, because the resources and the strategic patience available to that actor are not symmetrical with the resources available to the venue he is fighting. The venue he is fighting is operating without any of the institutional cover, regulatory positioning, or distribution surface that the Binance network provides as a default. When that win begins to materialise, it will not arrive as a single explosive moment but as a steady accumulation of integrations, listings, capital flows, and product launches that all route through one specific venue. Being positioned in that venue before the accumulation becomes obvious to the market is what produces the asymmetric outcome.

The Backing Is Not Subtle

Aster is a perpetuals and spot DEX built primarily on BNB Chain, backed by YZi Labs (previously Binance Labs) and the broader capital network around the Binance founder, with deep technical and integration ties into PancakeSwap, the flagship DEX of the BNB Chain network, including a 1001x leverage engine that was tested inside PancakeSwap before Aster brought it to market. Aster is not trying to hide its Binance connections because those connections are the entire point. CZ personally purchased two million dollars worth of ASTER tokens on November 2, 2025 using his own capital, publicly endorsed the launch as a “strong start,” and posted an ASTER chart on his Twitter account for the first time after years of posting only Bitcoin and BNB charts, which for anyone reading the signals is the strongest possible declaration that this is the asset the Binance founder wants the network to coalesce around. The price reacted within an hour, jumping roughly thirty percent on the day from $0.91 to a peak above $1.20. CZ explicitly framed the purchase in terms that compared it to his early acquisition of BNB during the first Binance token generation event eight years earlier, which is the kind of historical comparison that the founder of an exchange does not make casually about an asset he intends to treat as peripheral. The institutional layer that this has unlocked is moving faster than the market tends to credit. Binance Wallet integrated Aster’s perpetual futures trading directly into the wallet interface in January 2026, which means every user of Binance Wallet now has Aster perps available as a default option without needing to leave the Binance product surface. This is the kind of distribution advantage that no competing DEX can replicate without owning the stack that Aster has been handed.

The Product Solves The Right Problem

The technical claim that matters most for the long-term thesis on Aster is the hidden orders feature, because it is the single product decision that turns Aster from “a perp DEX with Binance backing” into “the venue institutional traders will choose when they need to move size on-chain without getting hunted.” The history of how this feature arrived in the product is worth tracing in detail, because it reveals exactly how synchronised the Aster roadmap is with the strategic imperatives of the Binance side of the perp market. In May 2025, the '“trader” known as James Wynn ran a Bitcoin long position on Hyperliquid that peaked at over a billion dollars in notional value before unwinding into roughly a hundred million dollars of losses over the following weeks, and Wynn himself argued in public that the visibility of his position on the Hyperliquid order book had made him a target for coordinated liquidation pressure rather than a victim of the macro Bitcoin drop that accompanied his unwind. CZ amplified that framing in a series of posts on June 1 and June 2, 2025, calling publicly for “dark pool” style perpetual trading on DEXes and arguing that the transparency of on-chain order books exposes large traders to predatory tactics that do not exist in traditional finance dark pools where institutional flow has lived for decades. Aster launched its Hidden Orders feature on June 20, 2025, exactly nineteen days after CZ’s call, becoming the first perp DEX to implement a credible cryptographic dark pool, using a commit-and-relay mechanism that conceals order intent until execution while still tapping the main liquidity book rather than fragmenting into a separate venue. The speed of that sequencing matters less than what it reveals about how the Aster product roadmap is being built, which is that the roadmap is shaped in direct response to the structural problems the Binance side of the war needs solved if it is going to (re)capture institutional flow from Hyperliquid. The speed of execution and the “hardcore” work philosophy of Binancians suggest that the team has the resources and the strategic clarity to keep solving those problems as they emerge.

The broader product surface reinforces the same positioning. Aster offers leverage up to 1001x through its ALP cross-asset liquidity pool, supports yield-bearing collateral so that traders can keep their margin earning passive income through assets like asBNB and the USDF yield token, runs spot and perpetual markets across BNB Chain, Ethereum, Arbitrum, and Solana, and added 24-hour stock perpetuals that allow on-chain trading of traditional equities with crypto-style leverage. Aster launched its own privacy-focused Layer 1 chain (Aster Chain) in March 2026, which is the kind of infrastructure investment that makes sense only if the project is being positioned as a long-term venue rather than as a tactical response to a single competitive moment. The chain’s mainnet launch coincided with Aster establishing itself as the second-largest perpetual DEX by trading volume behind Hyperliquid.

The Asymmetric Setup

What this combination produces is the cleanest asymmetric setup available in the perp DEX category right now, and the asymmetry is worth stating in plain language so that the position can be evaluated on its actual merits rather than on the noise that surrounds it. Hyperliquid is the dominant venue today, and its dominance has triggered the institutional and political response that the largest exchange in crypto is now organising against it. That response is going to succeed. The entity organising it has already destroyed one larger competitor inside a single quarter while retaining every operational capability that produced that outcome, and the response is being routed through the network with the deepest user distribution, the largest treasury, and the most aligned founder in the history of the asset class. The Binance side needs an on-chain venue that captures the flow Hyperliquid is capturing; the venue has to live on a chain Binance still controls, the venue has to offer the privacy primitives that institutional traders require to operate at size, and the venue has to be backed by capital and distribution that an independent competitor cannot match. Aster is the only project that satisfies all four conditions simultaneously, and this configuration was assembled deliberately by the people who have the most to gain from Hyperliquid being neutralised over the next twenty-four months.

In my previous piece about TAO, I argued for an asset whose thesis depends on patience applied to a supply-driven scarcity that compounds quietly in the background. The Aster thesis is structurally different because it depends on the competitive response of the largest player in the category arriving on a schedule that the market has not yet priced. The position takes care of itself once the response begins to land in measurable form, through Binance product integrations that have already started, through relentless product shipping by the Aster DEX team, through institutional flows that are being routed to the venue that solves their order privacy problem, and through the ASTER token mechanics absorbing the value capture that comes from being the canonical perp DEX of the Binance side of the war. Hyperliquid is the consensus pick right now, which is precisely why the asymmetric position is the one that bets on the counter-move. When the most powerful actor in crypto has staked his return to active operation on a single venue inside his own network, the outcome of the next twenty-four months is the one that produces an asymmetric payoff for the people who positioned in that venue while the consensus was still elsewhere. CZ does not lose. When he wins, in retrospect, you will have realized that you were positioned to win alongside him.

There is a particular kind of asset that lives in the corner of every cycle where the loud money refuses to look, and Bittensor’s TAO is sitting in that corner right now, mispriced not because the mechanics are hidden but because the people who would benefit most from understanding them are too busy chasing whatever launched on a meme launchpad this afternoon. The cleanest description of what TAO is borrows its cadence from Travis Kling’s well-known framing of Bitcoin as “a non-sovereign, hard-capped supply, global, immutable, decentralised, digital store of value,” and the parallel framing for TAO, with every qualifier earned rather than borrowed, is that TAO is a non-sovereign, hard-capped, programmatically scarce, halving-disciplined, decentralised, digital settlement asset for the open AI economy. My claim is that TAO can plausibly deliver a hundred-x from current levels across this cycle and the next, and the rest of this piece is the defence of every qualifier in that second line.

The Scarcity Pillar

The first thing to understand about TAO, and the reason the scarcity framing is not marketing language but a description of the actual protocol, is that Bittensor is hard-capped at 21 million tokens, which is the same number as Bitcoin and not a coincidence but a deliberate echo of the supply discipline that made Bitcoin work as a monetary asset. The network runs a four-year halving cycle that mirrors Bitcoin’s, with the first halving having already executed on December 14, 2025, cutting daily emissions from roughly 7,200 TAO per day to 3,600 TAO per day in a single block transition, and the subsequent halvings will compound the supply tightening at each four-year interval until emissions taper toward zero around 2032 to 2036. The mechanism is not governance-controlled and cannot be voted on by any subset of holders or developers, because the halving is hard-coded into the protocol and activates automatically when the circulating supply crosses each predetermined threshold, which is the same property that made Bitcoin’s monetary policy credible to institutional buyers who otherwise would not have touched a digital asset. The deflationary curve alone is not what makes TAO interesting, because plenty of capped-supply tokens exist and most of them go nowhere, but the curve becomes interesting in combination with the second mechanical detail that almost nobody outside the Bittensor community is talking about, which is that over seventy percent of the circulating supply is currently staked into validators and subnet positions and therefore removed from the immediately tradeable float. The combination of a hard cap, a freshly executed halving that cut new issuance in half, and a staking ratio that locks up the majority of what does exist produces a supply setup that is structurally tighter than almost any other major crypto asset. This in itself compounds quietly in the background regardless of what the price is doing on any given day.

The Institutional Pillar

The second pillar of the thesis is the one that most retail participants on this platform underweight badly, because they have been trained by (half) a decade of crypto culture to treat institutional involvement as either bearish or irrelevant, when in fact institutional accumulation in a hard-capped asset is the variable that moved Bitcoin from a thousand dollars to a hundred thousand dollars over a single decade and is the variable most likely to do the same kind of work for TAO. Digital Currency Group, which is Barry Silbert’s holding company and one of the most consequential capital allocators in the history of crypto, first invested in Bittensor in 2021 when the network was effectively unknown outside a small circle of decentralised-AI researchers, and that early position has since been operationalised into a full subsidiary called Yuma that launched in November 2024 with Silbert himself stepping in as CEO, which is the first time Silbert has taken a hands-on CEO role in four years and is the strongest possible signal that DCG is treating Bittensor as the headline allocation for its next investment phase rather than as a small line item in the portfolio. Yuma is not a passive holder, which matterssignificantly and is something the market has not yet fully internalised. Yuma operates as one of the largest validators on the network, runs subnets directly, accelerates and incubates new subnet projects, and as of October 2025 has launched a dedicated asset management arm anchored by a ten-million-dollar commitment from DCG that gives institutional and accredited investors a structured entry point into the network. On top of the Yuma layer, Grayscale and Bitwise have filed with the SEC for spot TAO ETFs, with decisions potentially arriving as early as August 2026, which would create the same kind of regulated capital on-ramp that turned Bitcoin from a retail asset into a sovereign-grade allocation across a two-year window after spot ETF approval. The base case here is not that institutional flows arrive and prices triple in a quarter, because that is the impatient retail framing of an institutional thesis, but that the institutional infrastructure is being built right now during the unfashionable phase of the cycle and will be sitting in place when the AI narrative re-accelerates and the broader market needs a clean institutional vehicle for exposure to decentralised AI.

The Product Pillar

The third pillar is the one that separates Bittensor from the long graveyard of AI tokens that promised infrastructure and delivered nothing, and it is the pillar that most thesis pieces about TAO either skip entirely or hand-wave through with vague references to subnets, which is a disservice to the reader and to the asset. Bittensor is a network of over one hundred and twenty independent subnets, each one a specialised marketplace where AI models, datasets, and compute resources compete for TAO emissions based on the quality of the work they produce, and the subnets cover everything from text-based AI tooling to confidential GPU compute to code generation tools that compete directly with Claude Code and Cursor, to computer vision pipelines that process raw video at scale, to protein-folding and financial-services applications that would be sitting inside walled gardens at OpenAI or Google in the centralised alternative. The metric that tells you whether this network is producing real value rather than merely producing emissions is the ratio of aggregate subnet token market cap to TAO’s own market cap, and according to Yuma’s State of Bittensor report published in March 2026 that ratio has now hit a record twenty-seven percent, which is a structural indicator that value is genuinely accruing to the subnet layer and flowing back to TAO holders through the staking and emission mechanics rather than evaporating into a marketing budget. This is the part where the cynical reader is allowed to remain cynical, because plenty of subnets will fail and most experimental projects on any open network do not survive contact with the market, but the relevant question is not whether every subnet succeeds but whether the platform as a whole produces enough successful subnets to justify the TAO token as the settlement layer for an entire emerging category of decentralised AI activity. The answer to that question, on the evidence available right now in early 2026, is that it is producing them faster than any other AI-native blockchain.

The Asymmetry

Pulling the three pillars together produces a thesis that is structurally cleaner than almost anything else in the market right now. The thesis rests on what TAO actually is rather than on what it could be made to resemble through marketing. What TAO actually is, on the evidence assembled across the previous three sections, is the dominant settlement asset of the decentralised-AI category at exactly the moment when that category is transitioning from a research curiosity to an investible thesis, with a hard supply cap that mirrors Bitcoin’s, a halving that has already executed in the way the mechanism was designed to execute, an institutional layer in DCG and Yuma that is positioned to absorb the next wave of capital, and a subnet network that is producing measurable value flows back to the base token at a rate that is accelerating rather than decelerating. A hundred-x from current levels on that combination of factors is a mathematical possibility that follows from the standard pattern of how scarce assets with maturing demand profiles get repriced when the consensus arrives, and the people who will collect that outcome are the ones who buy now while the room is still arguing about whether decentralised AI is real, hold through the inevitable drawdowns that come with any thesis trade that has not yet been consensus-validated, and unwind when the ETF flows and the institutional narrative have done the work the protocol designed itself to do.

The discipline required to hold this position through the noise is the same discipline that the previous article in this publication described at length, which is patience applied to a thesis nobody else has bothered to do the work to verify. The scarcity is real, the institutional accumulator is moving in plain sight, and the subnet network is producing real value flows back to the base token. Once those three facts are accepted as facts rather than debated as marketing, the position takes care of itself from the moment the trade is entered to the moment the consensus arrives to validate it.

May the FOMO be with you (at the price you deserve),

Baitman

I have just finished an episode of My First Million in which Shaan Puri sat down with Mohnish Pabrai, a value investor I had not come across before, and the conversation contained a track record and a philosophy that should embarrass most of the people on a crypto Twitter timeline who scream about their PnL between candles. The core of what Pabrai said, stripped of the anecdotes and the racetrack stories and the Berkshire hagiography, can be compressed into three words that no trader on crypto Twitter is psychologically capable of accepting, which is that the job is to do almost nothing. That sentence deserves an article, partly because it is the cleanest articulation of the philosophy that has actually built generational wealth in markets across every cycle of the past hundred years, and partly because it is the exact opposite of what this platform rewards every single hour of every single day.

Pabrai is a Buffett disciple who compounded a million dollars into something north of a hundred and forty million by being patient and concentrated, and the interesting thing about his record is not the multiple but the behavioural rule underneath it. He owns a Turkish warehouse operator called Reysas that is approaching a hundred-bagger in dollar terms, bought at three percent of liquidation value during a stretch when everyone around the asset was too busy day-trading the local currency to notice that the underlying real estate was being given away, and the position has now been held through seven years of macro chaos that would have shaken any trader out long before the thesis paid. The lesson is not that the reader should go and find a Turkish warehouse operator, because the lesson has nothing to do with warehouses or with Turkey. The lesson sits underneath the trade, in the structural behaviour that produced it, which is the same structural behaviour that produced every multi-decade outperformance in the history of markets and that almost nobody is willing to practise.

Patience Is The Job

Pabrai has a phrase he attributes to Buffett, which is that thou shalt enjoy watching paint dry, and he says it with a straight face because he means it as a literal job description rather than as a motivational slogan. The actual labour of being a good investor is patience, which is to say the thinking happens in private, the reading happens in private, the thesis-building happens in private, and the act that the world eventually sees, which is the buy followed eventually by the sell, is the smallest and most incidental part of the work. He told a story about how Buffett, as a twelve-year-old kid, used to sit at the Aksarben racetrack in Omaha collecting tickets that drunks had thrown away, taking them home, and studying them one by one to find winners that had been discarded by people too impatient or too inebriated to read their own results, and the point of the story is that this is the same process Buffett applied later when he sat in his office turning the pages of the Moody’s Manual at the rate of three or four companies per page across thousands of pages, looking for a single anomaly that would hit him in the head like a two-by-four. Pabrai mentioned that Buffett had been going through the Japan Company Handbook for twenty years before he finally made the Japanese trading-house bet that returned billions on borrowed yen, which is to say twenty years of turning pages before the trigger, and that detail is the one I want every “trader” to sit with for a moment, because it reframes what the work actually is.

Why Traders Will Not Do This

The reason traders do not behave this way is psychological rather than intellectual. The loudest accounts on crypto Twitter have the horsepower to run a Pabrai-style process if they wanted to, but they cannot afford to, because the identity they have built for themselves requires real-time affirmation that a slow accumulation strategy cannot provide. If you watch the engagement patterns on X with even a small amount of attention, you will notice that the loudest accounts are almost always traders posting screenshots of green candles, calling tops and bottoms with great confidence, and picking fights about position sizing and margin discipline, and the reason for that pattern is not coincidence but structure. A trader’s identity, assuming he isn’t a dogshit scammer, is built around being correct on a short timeframe, which means the trader cannot tolerate the proposition that a person who did nothing for three years just outperformed their entire portfolio by a factor of a thousand. Tolerating that proposition would mean conceding that the performance they have been running for an audience is not merely unnecessary but actively counterproductive to the goal they claim to be pursuing.

So the ego refuses to consider it, the screenshots continue, and the long game continues to be lost in a way that the trader cannot acknowledge without dismantling the identity that the trading itself was meant to support.

The asymmetric outcome, in this market and in every market, belongs to the person who bought Ripple in 2016 when the room was laughing at XRP and held through the years of regulatory uncertainty to a price that has so far returned several hundred times the entry, who bought SPX6900 in 2023 at a fraction of a cent when memes were considered a degenerate sideshow rather than a legitimate asset class and watched the position do an actual thousand-x as the community grew its own gravity around the “stop trading, start believing” thesis, and who is now positioned in TAO and ASTER because the AI-plus-crypto and perp-DEX lanes are where this cycle’s mispricing is sitting in plain sight for anyone willing to look. None of those outcomes was available to the person scalping the four-hour chart during the same windows, because the scalper was too busy producing trades to produce a thesis, and the people who produced theses and then sat on them quietly were the ones who collected the asymmetric payoff while the scalpers were still posting their daily PnL screenshots to an audience that confused activity with skill.

10/10

The October tenth liquidations of last year are the cleanest recent illustration of the point, and I want to be specific about them because they make the argument unanswerable. On that day, a cascade of liquidations wiped out an enormous amount of margin-funded capital across exchanges in a matter of hours, and the “traders” that had been posting their genius on the timeline for the previous two years were vaporised inside a single afternoon by a market move that none of their charting models had warned them about, while the survivors were people holding spot, sized appropriately for their conviction, and not glued to their screens during the cascade. Charting skill had nothing to do with who survived and who did not, which is the part that the trading-education industry will never tell its customers, because the survival of the industry depends on selling the fiction that more activity produces better outcomes. Whales are not whales because they traded their way up from shrimp through clever execution, which is the story that pump-and-dump caller channels need their followers to believe in order to keep paying for signals. Instead, they bought something cheap during a window when nobody else wanted it and then held the position through the entire cycle, and the handful of traders who genuinely accumulated wealth through trading alone are statistical anomalies, most of whom got their starting capital from an early spot position they had the discipline not to sell.

Shorter Cycles, Same Discipline

The honest counter-argument to all of this, which I want to address rather than dodge, is that crypto cycles are shorter than Pabrai’s equity cycles, and a person holding a Turkish warehouse for seven years has the luxury of compounding quietly across a slow asset class that does not require active unwind decisions every month, whereas a meme coin can do a thousand-x in six weeks and round-trip the entire gain in another six. This means the cycle from accumulation to distribution in this market is measured in months rather than decades and demands that the holder pay attention to the exit in a way that an equities investor does not. That argument is partly correct, and it does change the timing of the unwind, but it does not change the entry behaviour or the holding behaviour while the thesis remains intact, and the people who use the compressed timeframe of crypto as an excuse to behave like degens during the accumulation phase are the same people who blow themselves up every cycle and then explain it away as bad luck or “I’ll sell next cycle”. The principle survives the compression of the timeframe even when the duration of the hold shrinks from years to months, because the discipline being described is about whether you build a thesis before you take a position and whether you let the market come to your thesis rather than letting the timeline drag you out of it.

What this market actually rewards, and what almost nobody on CT names properly because it does not fit cleanly into either the trader identity or the long-term-investor identity, is a hybrid in which the patience of a Pabrai is applied to the accumulation and the holding while the timing instinct of a trader is reserved for the unwind. Most accounts on X have the timing instinct without the patience, which is exactly why most accounts on this platform end a bull cycle poorer in real terms than they began it, because the timing instinct without the patience produces a thousand small trades that aggregate to a slow bleed, while the patience without the timing produces a single concentrated position that compounds through the cycle and gets unwound thoughtfully when the consensus arrives.

The Mistress And Your Wife

The last Pabrai concept worth stealing for you is the mental model he calls the mistress and the wife, which is the simplest behavioural description of why portfolios get churned to death by their owners. The wife in this model is the position you already own and whose flaws you have come to know in detail, and the mistress is the new shiny thing on the timeline that you do not own yet and whose flaws you cannot see because you are looking at her from across the room. Pabrai’s claim, which is correct and which every honest investor recognises immediately, is that the mistress always looks hotter than the wife for the simple reason that you have not had time to discover what is wrong with her. Holy shit, read that again.

The investor’s job is to maintain an absurdly high bar for swapping the wife for the mistress, because in the overwhelming majority of cases the swap turns out to be a mistake driven by novelty bias rather than by genuine improvement in the position, and this is precisely what is happening every time someone on this platform sells their TAO bag to chase the launch of whatever shitcoin (or subnet) is trending in their group chat that afternoon. The new thing looks like alpha because it is unfamiliar, the position they already own looks boring because they know every flaw, and the swap, in aggregate across thousands of participants performing it simultaneously, is what produces the wealth transfer from the active to the inactive that Pabrai keeps describing in plain language while everyone nods and then goes back to performing exactly the behaviour he has just warned them against. Be inactive fren….

If there is a single conclusion to draw from sitting with the Pabrai material against the backdrop of this cycle, it is that outperforming the market does not require being smarter than the rest of the participants but being lazier than them in a precise way that matters, by being willing to build a thesis nobody else has bothered to build, taking a position most of the room considers stupid at the moment of entry, and then sitting on your hands through the period of doubt that follows until the consensus catches up with the position. That playbook is the same whether the asset is a Turkish warehouse, a Japanese trading conglomerate, an oracle protocol nobody had heard of in 2020, or a token sitting in the unfashionable corner of the AI-and-crypto intersection right now. The discipline that produces the asymmetric outcome is identical across all of them because the discipline is not about the asset class but about the relationship between the investor and their own impulse to act.

You’re welcome

Baitman

Let’s not pretend Tether hasn’t been here before.

Disbelief has been its shadow since day one. From Bitfinex leaks to offshore whispers to last year’s Twitter crusades, the chorus has always been the same: “They must be hiding something.” https://x.com/Bitfinexed has been screaming this since 2017 LMAO.

But what happens when the arrows come from above?

Last week, S&P Global Ratings downgraded Tether’s stability rating on USDT to “weak.” Not shaky. Not risky. Weak. This wasn’t a fringe research outfit, a far cry from a salty paid FUD influencer on a thread spree. This was a suit-and-tie ratings agency saying, in more words than necessary “we’re not sure this thing can hold under pressure.”

Their logic? Simple. Too much Bitcoin, not enough cushion. According to S&P’s breakdown, BTC now makes up roughly 5.6% of USDT’s reserves. That’s a higher share than Tether’s own overcollateralization margin, which clocks in around 3.9%. So, if Bitcoin drops hard(er) again, Tether’s backing risks falling below the threshold. Add gold, corporate bonds, and secured loans into the mix, and they say you’ve got a reserve stack that’s looking less like a stable base and more like a leveraged bet.

And that’s what spooked them.

“A drop in Bitcoin’s value combined with a decline in value of other high-risk assets could therefore reduce coverage by reserves and lead to USDT being undercollateralized,” S&P wrote.

But here’s the twist. Tether disagreed, and not quietly. Their response was immediate and uncompromising:

“Legacy framework. Doesn’t understand digitally native money. Ignores actual data. Still haven’t refused a single redemption.”

Seems like they are following the Roy Cohn playbook of ATTACK ATTACK ATTACK.

It was the sort of rebuttal you’d expect from a company that’s been punched in the face by regulators, media, and rivals for the better part of a decade and is still standing. They’ve leaned into their outlaw status. And now, they wear it like armor.

So, is the downgrade a big deal?

Depends on who you ask.

To crypto-native traders? Probably not. They’ve seen bigger scares. Tether depegged in 2022, briefly, and came back stronger. In many corners of the market, especially outside the U.S., it’s trusted more than any bank, and way more than Circle.

But to institutions? Different story. HSBC, in a December report, called S&P’s downgrade a “fresh reminder” of depegging risk. The bank suggested that institutions, particularly the risk-averse kind, are likely to gravitate toward stablecoins with higher-rated reserves and stricter disclosures. And not just stablecoins, but tokenized deposits altogether.

In other words: Tether remains king among crypto users, but the world it’s trying to expand into may have just narrowed.

HSBC even threw Circle a bone:

“USDC illustrates the type of positioning that could benefit if ratings and regulations become more central to stablecoin selection.”

Circle’s suits may be slow, but they’ve been playing the long game. The game of compliance, licenses, and friendly visits to Capitol Hill. And when rates drop, that positioning could matter even if it hasn’t helped them grow.

On a short but very relevant sidenote, let’s not forget that HSBC has been accused of money‑laundering for drug cartels and sanctioned regimes, facilitating massive illicit cash flows. It’s admitted to clearing hundreds of millions tied to cartel networks, paid the largest fine in banking history for AML failures, then quietly kept clearing questionable flows around the world. Its Swiss arm boasted offshore accounts for thousands of global clients, laundering hidden wealth. And just last year, regulators continued probing new suspicious activity at its private banking branches. That’s the company taking moral high-ground shots at a stablecoin issuer.

Meanwhile… Gold

If S&P raised eyebrows, the Financial Times made jaws clench. A November piece detailed Tether’s recent gold buying spree and the scale is no joke. Based on September attestations, Tether reportedly holds 116 tonnes of physical gold. That’s more than most small central banks.

And it’s not just sitting in the vault. According to Jefferies, a U.S.-based investment bank and financial services firm, Tether’s gold buys made up almost 2% of global demand last quarter and nearly 12% of all central bank purchases.

Why?

No one knows for sure. Ardoino has hinted that gold is “natural bitcoin.” Maybe it’s a reserve diversification play. Maybe it’s a prelude to USAT, the Genius Act–compliant dollar-backed stablecoin coming to the U.S. market. (Which, ironically, won’t even allow gold in its backing due to compliance limits.)

Or maybe, just maybe it’s a different kind of bet: one on tokenized physical gold becoming the next rail for value transfer. XAUt, Tether’s gold-backed token, has seen issuance double since summer. But let’s not get carried away, that’s from a relatively low base.

Still, the buys are happening. And they’re big enough to matter. At least in the short-term.

FT’s takeaway was dry but pointed:

“All that’s needed now is to convince risk-averse investors that their fears are best expressed through buying blockchain tokens from a privately owned, El Salvador–licensed crypto firm that says it has more than 100 unaudited tonnes of gold bars in an unidentified warehouse somewhere in Switzerland.”

A dig, sure. But not a lie?

The Real Question: Why Now?

The sudden surge in USDT issuance (another $1B in November), the gold stack, and the launch of USAT are obviously coordinated.

Is Tether preparing for something?

Some think it’s a hedge against U.S. regulatory pressure. By offering a compliant version (USAT), they can continue the offshore playbook with USDT while showing regulators they’re capable of “playing nice.” Same stablecoin DNA but just with different passports.

But others, particularly critics, think it’s a sign that the original model might be running out of road. That holding bonds, gold, and Bitcoin while fielding redemption requests isn’t sustainable forever. Especially with mainstream finance circling and sovereigns waking up.

Either way, it’s not solvency that’s being questioned anymore, it’s more a matter of direction (and re-allocation)

Tether’s Response? On (builder) Brand

Ardoino didn’t mince words. After the S&P downgrade, he tweeted:

“We wear your loathing with pride.”

They’re not trying to win popularity contests, never have really. They don’t court the VC class. They don’t spend millions on lobbying (they might actually). They’ve been called opaque, unregulated, borderline rogue. And yet? They’ve never once broken their peg beyond a temporary blip. Never once frozen redemptions for verified clients. Never been hacked. Never shut down.

And oddly, I guess it’s their defiance that some users trust. In parts of the world where access to banking is unreliable, Tether is the financial system. Their willingness to operate outside the polite rules of capital is the feature that others claim is a bug.

Why Being a Tether Truther Is Net Negative for Your Life

There’s a difference between being systemically important and systemically accepted.

Tether is the former. Whether you like it or not, USDT props up massive swaths of the crypto economy. It’s in trading pairs, DeFi pools, remittance corridors, and OTC desks from Istanbul to Jakarta.

But the latter being accepted by institutions, regulators, sovereign frameworks, is still very much in play.

S&P’s downgrade will obviously not stop traders from using USDT. But it may temporarily cap how far Tether can extend its empire. It may slow adoption in markets where perception, regulation, and checkbox compliance matter more than uptime.

That’s why narrative is the real war.

And for Tether, it’s always been a fight to control the story before someone else does.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

Let’s not pretend this came out of nowhere.

For months, the writing was on the wall. U.S. lawmakers were circling. The GENIUS Act was inching closer. Circle was pivoting into full compliance cosplay. And Paolo? He was telegraphing the move in broad daylight.

So now it’s official. Tether is launching a U.S.-regulated stablecoin: USA₮. Full Boomer Mode, complete with a handpicked CEO (Bo Hines), a Cantor Fitzgerald custody deal, and a press release so patriotic it could’ve been drafted on Capitol Hill.

But if you’ve been reading The Stable Wars, you already knew this was coming.

I laid it out back in May and March. A bifurcation play; ne offshore token for the trenches (USDT), one sanitized version for Washington’s dinner table (USAT). Tether has been reading the room and front-running regulation with a structure no one can kill.

Let’s unpack it.

The Two-Tether Strategy Is Now Official

There’s now a clean split:

• USDT stays offshore. Dirty, liquid, everywhere. For traders, OTC desks, and people with real (hyper)inflation problems

• USA₮ becomes the compliant cousin. Fully regulated under the GENIUS Act, issued by Anchorage Digital Bank, backed by U.S. Treasuries, and wrapped in Bo Hines’s Yale-colored patagonia shirt

It’s the same dollar but with different trade-offs; and different masters.

If you’re a U.S. exchange or a bank looking to tokenize payments and payroll, USA₮ gives you the checkbox you need. If you’re a Turkish importer or Nigerian freelancer, USDT is still your best bet.

Circle Just Lost Its Monopoly on Clean Money

For years, Circle’s value prop was: “We’re the compliant one.” That moat just got torched. Tether just replicated Circle’s playbook includign but not limited to federal compliance, institutional rails, transparent reserves…….and they added a few tricks Circle can’t match:

• Tether’s reach is 10x wider

• $13B in 2024. Circle is nowhere near in the same league

• Tether doesn’t need a glossy rebrand to sound global. It already is

If USAT gets traction with banks and payment partners, Circle’s “clean and compliant” brand edge vanishes. And if it doesn’t? Tether still controls the dominant token across emerging markets. Either way, Circle will now start playing defense.

USAT Is a Trojan Horse for Dollar Dominance

If you look past the compliance fluff, USAT is how Tether gets inside the U.S. perimeter without giving up the war outside it.

You want dollars? We’ve got two flavors:

• Frictionless (USDT)

• Regulated (USAT)

Pick one or use both. Either way, the dollar wins. The real brilliance here is that USAT doesn’t replace USDT. It absorbs U.S. compliance pressure while letting USDT continue being the grease for every non-sanctioned dollar transaction on earth.

Tether isn’t just defending its turf. It’s expanding the map.

Don’t Let the Stars & Stripes Fool You

The Bo Hines appointment? The Cantor connection? The Hadron buzzwords? It’s all signal. But don’t mistake the wrapping for the product.

Tether is still Tether. This is a company that prints dollars faster than some central banks, owns more U.S. Treasuries than Australia, and runs one of the most profitable businesses in fintech history. I imagine UAST was their most stressful build yet; not to appease regulators, but to box out competitors.

The Gameboard Has Changed. Again.

The stablecoin war just got a new lane and a new weapon. Circle’s vision of owning the rails through compliance got countered by Tether by owning the network and offering compliant access as a product, not a sacrifice.

USAT is the opt-in version of legitimacy. Not everyone needs it. But now it exists. And it’s backed by the same behemoth that built USDT into a $169B global monster.

Which brings us here:

The Future Is Fragmented.

There won’t be one winner. There will be layers.

• Institutions will use USAT

• Emerging markets will cling to USDT

• Circle will scream about “trust”

• Politicians will keep pretending they understand

But the real story?

Tether just made the U.S. dollar even harder to kill.

Receipts

• My original article from May predicting this: What the Genius Act Could Mean for Tether

• My March piece outlining the bifurcation path: What Happens if the U.S. Forces All Dollar Stablecoins to Be Issued Domestically

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

Circle just announced their latest brainchild: Arc, a new Layer 1 blockchain built for “stablecoin finance.”

Here’s what they want you to believe: Arc is the missing infrastructure for the future of finance. It comes with sub-second finality, dollar-denominated gas fees, privacy options for enterprises, native USDC support, and integration with Circle’s full stack.

Here’s what they’re not saying: This is a desperate attempt to avoid irrelevance.

Circle is a company that builds for compliance officers, brand consultants, and whatever banking partner they’re trying to impress that week. That’s fine, but don’t confuse it with building the kind of infrastructure that actually survives onchain and is meant for users.

When rates drop; and they will, what’s left of Circle’s entire revenue model? They don’t have the reach. They don’t have the trust of actual crypto users. They’ve spent more time lobbying Congress than shipping anything users actually want.

Arc isn’t here to serve users. It’s here to make Circle more palatable to public markets. It’s a brochure chain. A proof-of-concept built for boardrooms.

Contrast that with Tether, a company that everyone loves to hate, yet has managed to embed itself in real-world markets everywhere, from Nigeria to Argentina to Turkey to Ukraine. Tether sometimes is a little messy. It’s definitely not always polite. But it works and it’s used by the world; it’s why I call it “The People’s Project”. It moves value at the edges of the global financial system where banks fail, where regulators waffle, and where people still need dollars.

You can criticize their audits. But you can’t say they don’t have product-market fit.

Arc might impress a few institutions or analysts who have just discovered MetaMask in the last year. But it won’t win the stablecoin war.

Because the war isn’t about who can write the most compliant whitepaper. It’s about who people actually trust when the banks are closed, when inflation bites, and when you need dollars fast.

And so far, Circle hasn’t shown up to that fight. Not once.

Breaking down the litepaper: what’s solid, what’s squishy

1. “Decentralization,” redefined

Arc’s validators are permissioned institutions. The paper argues this is a new kind of decentralization; spread across big, global entities. In practice, that’s a country club, not open membership. It may fit bank policy and compliance, but it concentrates gatekeeping and turns validators into policy levers.

2. The speed numbers leave out the hard part

Those fancy TPS/latency charts exclude EVM execution. Consensus-only latencies are always pretty; real apps pay for execution, storage, gas auctions, and integration. Arc will still be fast, but the headline claims aren’t end-to-end. The paper says this quite plainly actually.

3. Privacy is a promise, not a feature (yet)

“Confidential transfers” start by hiding amounts, not addresses. Auditors get view keys and the compute trust sits on TEEs, which moves trust to hardware vendors and enclave supply chains. ZK/MPC/FHE come “later.” If you need production-grade private finance on day one, this isn’t that. But thanks for the roadmap.

4. MEV mitigation is also a promise

The paper splits MEV into good (arbitrage keeps stablecoin FX tight) and bad (sandwich/front-run at the till). Mitigations, encrypted mempools, batch processing, and multi-proposers are planned, but not live. Thanks for the roadmap.

5. Fees fund an Arc Treasury

Fees are deposited into an on-chain Arc Treasury at launch. Who steers it? Under what policy? With a permissioned validator set selected by institutions, rent collection and rule-making sit closely together. You could argue that users inherit the policy risk. But time will tell ofcourse.

6. “Open” rails with a house currency

USDC as gas makes accounting clean and UX familiar for CFOs; it also anchors the chain to Circle’s instruments and controls. Yes, a paymaster can accept other stablecoins, but the native cash register is USDC.

7. Cross-chain as a distribution moat

Arc’s “burn-here, mint-there” pitch leans on CCTP which is ofcourse efficient for USDC. The paper says they aim to extend utility to other stablecoins, but the fast path is built around Circle’s mint/burn flow. Liquidity gravity will follow the shortest path.

8. The big reveal

This line from the architecture section is the tell: “a permissioned set of validators… institutional-grade… tailored for regulated financial applications.” That’s a bank-grade chain Circle can govern with big-name partners. It’s not built to be ownerless; it’s built to be acceptable to large institutions and regulators, on Circle’s terms.

So where does this leave Tether?

Tether already won distribution and liquidity where it counts: offshore venues, OTC desks, and dollar-hungry markets outside neat compliance boxes. It’s chain-agnostic and plugged into the places people actually move value.

Circle builds for boards and regulators; Tether is used by the street.

Who should pick what?

Pick Arc if you need a named counterparty, bank-grade audit trails, dollar-denominated fees, opt-in disclosure with view keys, vendor support, and a curated validator set your risk team can underwrite. You’re buying assurances and a change process that sits with Circle and partners.

Pick USDT on open rails if you need reach across CEX/P2P/OTC, instant settlement on many chains, balls deep liquidity in dollar-hungry markets, and minimal friction for counterparties outside U.S. policy boxes. You’re buying distribution and speed, and you accept ongoing debates about disclosure and uneven policy treatment by region.

These are different buyers and different jobs. Arc is for regulated flow inside the fence. USDT moves dollars in the open. Both can do well. One will win.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen.

After a short summer break, I’m back; not with a Tether update (for once), but with thoughts sparked by a recent podcast from a16z Crypto. In this episode, General Partners Ali Yahya, Arianna Simpson, and guest Erik Torenberg attempt to “cut through the noise” and ask a timely question: What’s actually working in crypto today?

From stablecoins quietly powering global payments to the emerging convergence of AI and programmable money, the conversation avoids buzzwords and gets to the core of how crypto is gaining real traction. It’s a refreshing listen, especially at a time when headlines tend to obscure more than they reveal.

Stablecoins Are Quietly Winning (supposedly)

One theme the podcast zeroes in on is stablecoins. Ali Yahya calls them “the clearest real-world use case in crypto today.” And it’s hard to argue with that. With over $16 trillion in on-chain stablecoin volume annually, and companies like Stripe and SpaceX now paying salaries or vendors with stablecoins, it’s clear we’re past the experimentation phase.

And yet, the market still underestimates how disruptive stablecoins are to legacy finance. We’re not just talking about saving on wire fees. We’re talking about rewiring how money moves; from remittances to payroll, from emerging markets to US startups.

Arianna Simpson adds nuance here: most people still think of stablecoins as crypto-native instruments, but their real utility comes when they escape the crypto sandbox. That’s already happening across Asia, LATAM, and parts of Africa. In that light, regulatory clarity, especially from the U.S., will act more like a volume unlock than a risk suppressor.

Who Gets to Build Money?

One of the most powerful ideas from the episode comes when Erik Torenberg reframes the question:

“Stablecoins aren’t just eating payments. They’re changing who gets to build money.”

This flips the lens completely. The fight isn’t just over better rails; it’s over monetary agency. Until now, only sovereigns and banks could issue money. With stablecoins, the ability to issue and scale programmable value flows becomes available to a much broader set of actors.

That makes this more than a fintech upgrade. It’s an economic power shift.

Solana vs Ethereum, Beyond the $HYPE

The episode doesn’t sidestep the smart contract wars either. Ali makes the point that Solana’s performance edge…..especially in payments…..gives it serious credibility. The fact that Visa uses Solana as part of its stablecoin pilot is no small deal. However, if you have been in the space for at least two cycles you will understand that “partnerships” hodl little true value….I digress.

At the same time, Ethereum’s network effects, developer tooling, and Layer 2 ecosystem still offer the deepest bench. The market may bifurcate: Ethereum for programmable apps, Solana for fast money movement. That’s okay. What matters is use-case fit, not maximalism.

AI x Crypto: Still Early, But Inevitable

Toward the end, the discussion shifts to the intersection of AI and crypto. Arianna rightly cautions against vague hype, but Ali makes a smart point: in a world of agentic AI, you need programmable money. If AI agents start managing tasks, coordinating resources, or even negotiating contracts, they’ll need a native value layer.

Crypto is that layer.

Stablecoins give AI something to spend.

Smart contracts give it rules.

Open protocols give it autonomy.

This intersection is early, but it’s logically aligned.

Balaji has spoken about this intensively…..

Misconceptions, Regulation, and What Actually Matters

The podcast closes by dismantling a few persistent myths: that crypto is just about trading, that regulation kills innovation, that no one’s building anything real. In truth, progress has been quiet but foundational.

As Erik notes, it’s not that crypto hasn’t delivered. It’s that the framing was wrong. We expected Wall Street disruption. What we’re getting is financial plumbing that works better across the world.

And that’s supposedly more profound.

Sometimes the crypto16z Kool-Aid is worth Drinking

In a space that often rewards spectacle over substance, this podcast was a grounded and nuanced reset. It reminds us that real crypto adoption isn’t about token prices. It’s about better experiences. Faster payments. New trust layers.

And stablecoins, more than anything else, are at the heart of it.

Listen to/ watch the full episode: a16z podcast – What’s Actually Working in Crypto Today

Kind regards,

Baitman

People love to say Tether will be the most profitable bank in the world. They see a chart: $13 billion in profit, 100 employees. They compare it to JPMorgan with 300,000 employees and think, “Look at that margin!”

It’s a fun brag. But what does it really mean?

What Tether Is (and Isn’t)

Tether does not lend your money. It does not run branches. It does not insure deposits. It sits on a pile of short-term U.S. debt and spins off interest. It mints tokens so people anywhere can move dollars fast. That’s it.

Banks do a lot more. They take deposits, lend long, manage risk, hold capital buffers. That’s why they hire armies of people and get bailed out when they mess up. Tether skips all that. No lending, no retail, no local branches. Just code and reserves.

So, is it really fair to call it “more profitable than a bank”? Kind of. But it’s like comparing a lean payment network to a full-service financial giant. One is an engine. The other is an empire. Different risk, different responsibilities.

Why It Works Now

Tether works because rates are high and costs are low. It doesn’t spend on heavy compliance in every country. It doesn’t run a giant office footprint. It does one job well: give the market dollars when normal banks or regulators make that hard.

In Nigeria, Lebanon, and Argentina, people want dollars. Their local banks fail them. Tether fills the gap. For many, this is more about survival than profit.

What Could Break It

A few things keep this machine humming:

• Rates: Tether earns money from short-term Treasuries. If rates fall, so does profit.

• Trust: Users trust Tether holds those assets. If trust fades, people stop using it.

• Rules: If the U.S. or EU cracks down on offshore dollar pipes, Tether might need to spend more on lawyers, audits, licenses. Costs rise. Margins shrink.

• Competition: Circle, PayPal, banks, or big fintechs could match the product, a dollar on a blockchain, but with more trust for big institutions.

Today, they haven’t. That’s why Tether stays huge.

The Real Advantage: Distribution

Forget “most profitable bank.” The real story is that Tether has built a rail for dollars in places where banks, PayPal, or Visa are slow, expensive, or absent.

They have a messy, global, informal network: OTC desks, Telegram groups, local brokers. This is hard to build and harder to shut down. It is also risky. It’s Tether’s moat, but it could vanish if regulators really crack down or if better stablecoins come along.

Penny For Your Thot: Maybe It’s Not About Profit

Here’s a twist: Tether’s job is not to beat banks at profit per employee. Its job is to move dollars where banks can’t or won’t. That’s why 100 people are enough. If rates drop, they’ll make less money but the need for free-flowing dollars doesn’t vanish.

So Tether is a signal: people want dollars with no bank strings attached. That’s the point. Not that it’s a mega-bank, but that people want money without a middleman.

Next time someone posts that Tether is a “top bank,” remember:

• It’s more fragile than it looks

• It has no backup business if yields drop

• It exists because banks fail the people it serves

If banks and regulators fix that, Tether shrinks. If they don’t, Tether stays big. Simple as that.

My Take

Tether is not a bank. It’s a mirror showing how much the dollar is worth outside the formal system. It highlights how flawed that system remains.

That’s why it matters.

Beyond the Meme: What Tether’s Profits Really Mean…. a recap

Tether’s profits are now bigger than Goldman Sachs, and nearly half of JPMorgan’s. They do this with about 100 employees. Compared to a bank with 300,000 staff, that’s wild.

One hot take says Tether is the world’s smallest, leanest mega-bank. Another says it’s proof that crypto is eating finance from the inside.

Both miss something. Tether isn’t just a bank with fewer people. It’s a liquidity engine. It moves dollars where banks often don’t; and where people trust them least. That’s where the profit comes from: sitting on short-term Treasuries and sending dollars around the world 24/7, with no branch manager to say no.

This model is fragile if trust breaks. But Tether’s real edge is that, so far, trust hasn’t broken; not in emerging markets, not in Asia’s OTC desks, not in the billions of dollars moved daily by people who don’t care about crypto Twitter.

So yes, more profit than Goldman. But also: more reach, more local relevance, and more flexibility to go where banks won’t.

The deeper lesson is simple: big profits are a side effect. The core game is owning the rails where real people want dollars.

If you’re watching where the next dollar network is being built, watch Tether. The profits just make the scoreboard easier to read.

This isn’t a Tether article.

I know, I know…..surprising. But today, I’m stepping out of my usual rhythm to dive into a different stablecoin perspective. I recently listened to a16z crypto’s podcast featuring Chris Dixon and Sam Broner, and it laid out one of the more coherent, long-term views I’ve heard in a while. It’s not about memecoins, yield-chasing, or regulatory catfights. It’s about payments, infrastructure, and where the puck is actually going.

I wanted to share some reflections; not because I agree with everything they said, but because this kind of thinking deserves to be unpacked. Let’s break down what stood out, what they’re getting right, and where the gaps still lie.

Stablecoins as Public Infrastructure

Dixon and Broner argue that stablecoins represent a horizontal layer; a new kind of neutral rail for global money movement. Unlike traditional financial systems that rely on layers of intermediaries (banks, processors, clearinghouses), stablecoins can be built on blockchains that anyone can access and build on.

Their thesis is clear: blockchains unlock a global, programmable, interoperable financial layer, like the web, but for money. Not merely about cost savings; more about reimagining how payments, credit, and commerce get stitched together.

But they also call out the paradox: this is the most widely used crypto product, with trillions in volume, and yet it’s the hardest to invest in. Why? Because the margins are compressed, and the product is structurally public-good-ish. It’s infrastructure. Not the kind of business that prints monopoly profits.

That’s part of what makes the stablecoin wars so fascinating. Because multiple players are building a money layer.

Composability Is a Bigger Deal Than You Think

One of the more important ideas the podcast raises, without shouting it, is composability. Stablecoins, as programmable money, allow anyone to plug into a global network of financial primitives: custody, lending, payments, and compliance.

That’s a yuge unlock.

Today, to build a payment app, you need to deal with multiple APIs, licensing, fraud tools, banking partners, FX desks, etc. But with stablecoins and open infrastructure, the startup cost of launching a financial app drops dramatically. You can now focus on the UX, not the plumbing.

As Broner noted, that’s how products like Blackbird (restaurant loyalty meets payments) can emerge. You couldn’t build something like that efficiently 5 years ago.

This is also why stablecoins will quietly reshape e-commerce, tipping, creator payments, streaming pay-per-second, and anything else that was too annoying to implement before.

Regulation as a Catalyst, Not a Constraint

There’s always been a weird dynamic in crypto: people loathe regulation, but regulation is also the very thing that unlocks institutional adoption.

The a16z crew makes it clear that regulation, especially something like the GENIUS Act, tells the banks, the fintechs, the payment service providers that it’s now safe to move. I guess that is a refreshing take….

Once that floodgate opens, stablecoin volumes will take the non-linear path…

They point to how Section 230 helped catalyze the internet, laying a legal foundation for builders to experiment. We could be looking at a similar moment for stablecoins.

Where Value Accrues in a Post-Intermediary World

This is the most important and perhaps most underexplored point in the episode.

If stablecoins eat payments, and intermediaries fade into the background, where does value accrue?

The a16z answer is layered and probably gives you a good insight into what they are (and will be) investing in.

• Infrastructure (wallets, on/off ramps, compliance rails)

• Fintech wrappers that abstract complexity

• Protocol-level service providers (escrow, fraud protection, vaulting)

• And eventually, reputation and identity layers that live natively on-chain

In other words, stablecoins become the foundation, but the real differentiation and business opportunity lie in the services built on top.

Even though they are coming and arguably are already here, you don’t need 100 different stablecoins. You need 100 different use cases built on top of one or two dominant ones.

Where Tether Fits (or Doesn’t)

Now let’s bring it back to my usual beat. Whether or not you agree with the a16z worldview, it does raise the question: where does Tether fit in?

Tether is the undisputed liquidity king. But it doesn’t play by the same game. It’s not pitching U.S. policymakers. It’s not angling for bank partnerships or IPOs. It’s shipping product into markets that most of the crypto elite don’t even think about. Tether after all is “the people’s project”

Definitley recommend listening to the full episode, even if you’re Team Tether. Because the future of stablecoins won’t be winner-take-all. It’ll be layered. Regulated coins for institutional rails. Off-shore liquidity coins for the rest. Localized fintechs wrapping it all in clean UX.

In that world, everyone wins; or at least some do…..

Senator Bill Hagerty’s recent speech was a call to weaponize stablecoins for U.S. economic dominance.

It doesn’t just sound dramatic, it is. Replay his words, and the logic becomes clear: the Genius Act is not about innovation for innovation’s sake (well well well). It’s about giving the U.S. a lever to modernize its payments infrastructure, soak up global demand for Treasuries, and entrench dollar supremacy in a world that’s drifting towards fragmentation.

Quote by quote…..

“This will ensure U.S. dollar dominance. It will advance our position as the reserve currency in the world rather than see the retreat and decline that we might otherwise experience.”

It’s not about Circle, Coinbase, or even crypto as we’ve come to know it. He is talking about architecture and about rebuilding U.S. financial plumbing with instruments that can travel the internet at the speed of content, while still flying the U.S. flag.

“Today it’s an unregulated market… What we’ll do is make certain that everyone knows that stablecoins are backed by U.S. dollars and that those dollars are backed up by cash and short-term U.S. treasuries.”

This is the crux of it: stablecoins, if compliant, become extensions of the Treasury market. Not competitors to banks. Not challengers to the Fed. But demand engines for short-dated debt, giving the U.S. a new distribution channel for dollar-denominated instruments.

Hagerty even points out that by the end of this decade, U.S.-based stablecoin issuers could be the largest holders of Treasuries in the world. That’s a very sober projection based on the compounding demand for programmable dollars.

So What Does This Mean for Tether?

Well, that depends on what kind of role you believe Tether wants to play.

If Tether wants to participate in the U.S. regulated market, then a new entity (USDT2 or some variant) will likely need to emerge. Fully backed by regulated banks, audited reserves, and subject to oversight. In that scenario, Tether becomes indispensable infrastructure.

But there’s also a parallel world. One where Tether continues to dominate outside the U.S. precisely because it is not entangled in U.S. compliance frameworks. A dollar proxy with looser rules, but deeper reach. For millions of users across Asia, Africa, and LATAM, that’s not a bug. It is the feature.

Hagerty, Lummis, and others are setting the stage for a multi-tiered system:

• Compliant, onshore stablecoins that serve Wall Street and state-sanctioned retail access

• Unregulated, offshore stablecoins that do the same thing U.S. dollars always did; circulate as hard money in unstable economies

Tether currently operates as an offshore issuer, dominating global markets with liquidity, speed, and ubiquity. Its reserves already include a massive amount of U.S. Treasuries over $115 billion. But despite that alignment with the dollar, it’s still not U.S.-based, not U.S.-regulated, and not part of the Washington-centric compliance apparatus that GENIUS seems to favor.

And here’s the most revealing line:

“I’d far prefer a benign stablecoin issuer to the CCP or other sovereign nations.”

Hagerty is saying the quiet part out very loud: stablecoins are now a geopolitical lever. One that can be used to counter China’s digital yuan, displace euro-denominated trade zones, and fill vacuum markets with digital dollars that always settle.

Whether you like stablecoins (and their ever-so-eager regulators) or not, this is the game. And if the Genius Act passes, it will make that game official U.S. policy.

• Who gets the early mover advantage?

• Will Circle’s IPO become a moat or a liability?

• Can the onshore model offer yield without getting torpedoed by securities law?

• Will Tether split itself to serve both sides of the regulatory membrane?

In a world where every layer of finance is being redrawn, it’s not enough to be dominant. You have to be adaptable. Tether has survived and thrived through every regulatory wave so far. This next one could define how much of the future it gets to write.

During a Consensus 2025 side event in Toronto, Senators Cynthia Lummis and Kirsten Gillibrand expressed confidence that the Genius Act, a bipartisan stablecoin bil, could be approved by Memorial Day. Congressman French Hill echoed the sentiment, adding that both the stablecoin and crypto market infrastructure bills are being actively aligned for potential presidential approval before the August recess.

The Genius Act, which has undergone multiple revisions, is focused on clearer consumer protections, bankruptcy protections, and stricter oversight of both domestic and foreign stablecoin issuers. It is being created to address institutional and retail use cases, while “minimizing” systemic risk.

So, What’s at Stake for Tether?

Tether is the obvious elephant in the room. Although based offshore and operating outside U.S. jurisdiction, the company’s role in global dollar liquidity is impossible to ignore. As of today, USDT represents the vast majority of stablecoin volume across emerging markets, OTC desks, centralized exchanges, and even remittance corridors.

If the Genius Act passes, the U.S. will have a formal framework for approving and overseeing stablecoins. This means clear conditions for compliance, especially for those issued within U.S. borders. But it also means foreign stablecoin issuers like Tether will be formally categorized, and potentially restricted, in their interaction with U.S.-based platforms, payment channels, and financial institutions. Hence Paolo’s tweet:

https://x.com/paoloardoino/status/1920553400191643694

In short: the Genius Act may not outlaw USDT, but it will significantly limit its formal use in U.S.-compliant platforms.

Tether’s Options

Tether likely sees this coming. There’s been talk, including from Paolo Ardoino, about launching a fully U.S.-compliant version of USDT, like I predicted in my earlier articles. This could come in the form of a separate, ring-fenced stablecoin (let’s call it USDT2 again) issued under a U.S.-registered entity, backed by fully audited reserves, and meeting every provision the Genius Act might require.

This dual-rail strategy would let Tether maintain its global USDT dominance while carving out a compliant lane for regulated institutions to use in U.S. markets.

Meanwhile, offshore USDT continues to serve the needs of users in Argentina, Nigeria, Turkey, Southeast Asia, and elsewhere, where the demand for USD liquidity isn’t waiting on Senate votes.

Regulatory Narrative vs. Ground Reality

One of the most important takeaways from this bill is the emerging bifurcation in the stablecoin market. The Genius Act, if passed, will codify what is "legal" stablecoin behavior in the U.S. But outside its borders, USDT will continue to thrive precisely because of its frictionless nature. Cross-border payments, crypto-native trades, OTC commerce, and even dollar-denominated savings habits have already formed around USDT.

Even with potential restrictions, no other stablecoin comes close to matching Tether's market penetration. Circle’s USDC, despite being based in the U.S., remains highly dependent on compliant infrastructure, which limits its adoption in non-banked or high-inflation regions.

The Genius Act might be successful in creating a well-regulated stablecoin class within U.S. capital markets. But it likely won’t erase the market share Tether has amassed elsewhere.

The Trump Distraction

While Senators Lummis and Gillibrand made a point to decouple the Genius Act from the recent headlines surrounding Trump’s alleged memecoin and airplane-related controversies, there’s no denying the political tension. Senator Gillibrand called some of Trump's actions potentially illegal under the Emoluments Clause and expressed concerns about fraud and corruption.

This added layer of political noise could either delay the bill or force legislators to frame it even more strictly in order to appear above reproach. Ironically, this might create additional pressure to draw clear regulatory lines between sanctioned, U.S.-backed stablecoins and the rest of the market.

A Path Forward

The Genius Act is unlikely to ban Tether. But it will give U.S. regulators a clear framework to define what constitutes a "legal" stablecoin domestically. Possibly resulting in:

• U.S. exchanges being required to delist or ring-fence USDT

• Tighter banking and payment partner requirements

• New compliance obligations for wallets and DeFi platforms that support stablecoins

In the end, Tether’s global strategy will remain intact. The Genius Act will draw a perimeter around what is considered legitimate within the U.S., but it will also sharpen Tether's messaging outside it: that they are still the most liquid, accessible, and flexible dollar proxy on the planet.

And in a world where the average user just wants to hedge against (hyper) inflation, that might matter more than any piece of legislation.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

If you've been around crypto long enough, you learn to filter out the noise. A lot of partnerships are just that….headlines designed to impress investors or stir up some short-lived hype amongst “armies”. But every now and then, something lands with longer-term implications.

That’s what this latest announcement from Tether looks like.

USDT will now be natively deployed on the Kaia blockchain (formerly Klaytn), in collaboration with LINE NEXT. LINE is one of Asia’s largest messaging platforms, with over 170 million monthly active users across Japan, Taiwan, Thailand, and Indonesia.

This integration brings USDT into LINE’s Mini Dapp platform and self-custodial wallet, enabling in-app payments, cross-border transactions, and access to DeFi tools; all within an app many users already rely on. In effect, this puts stablecoins into the day-to-day flow of mobile users across Asia. For Tether, this allows them to deepen access in regions where stablecoins are more of a utility than a narrative. And it happens outside the purview of U.S. politics or EU regulatory cycles.

On a personal note, I met Jaesun Han, CEO of Klaytn, during an event at the Web3 Festival in Hong Kong back in April 2024. We spoke about the Kaia strategy, the LINE partnership, and their user base. What stood out was the seriousness with which they approached user distribution and product design. It felt less like a crypto company chasing buzzwords and more like a tech team working toward something durable.

That’s important context for this partnership. Because what we’re seeing with Kaia, LINE, and Tether is a bullish signal of Web2 meeting Web3, not through surface-level integrations, but through native infrastructure alignment. Like a convergence of distribution and utility. Web2 companies like LINE have massive built-in user networks and interface dominance, while Web3 infrastructure like Kaia and USDT brings composability and financial self-custody.

If you’ve ever used WeChat in China, you’ll understand the endgame. WeChat is 1000x more than messaging….it’s payments, banking, shopping, even access to government services. It’s a parallel digital layer woven directly into society. And what’s happening now with LINE and Tether might be an early signal that crypto, finally, is building something similar: user-first, invisible finance, natively embedded into apps that already run people’s lives.

We’ve seen it before, Telegram integrating with the TON ecosystem and acting as a massive distribution funnel for crypto-native products. The difference is: LINE already has regional penetration and digital payments familiarity baked in. So USDT doesn’t feel like a bolt-on feature. You could almost say that it’s a natural extension…

As the stablecoin industry becomes more competitive, more regulated, and more accepted as a serious industry, the companies that win won’t just be the ones with regulatory blessings or deep reserves. They’ll be the ones who understand how to tap into existing user networks; and meet people where they already are.

That’s the best way I can summarize what this Kaia and Tether collaboration reflects.

Yet another reminder that the stablecoin wars won’t just be fought on compliance papers or (Ethereum) block explorers. They’ll be fought but predominantly won through integrations that feel invisible; until they're everywhere.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

“You’re a bright young man. This monkey business is in your blood, under your skin. You’re not getting out, you’re just getting in, you’re only getting started. I’ve every faith in you. And one day in the future it will be you sitting here in my place… telling some young Turk the facts of life.

You’re born, you take shit. Get out in the world, you take more shit. Climb a little higher, take less shit. Until one day you’re up in the rarefied atmosphere, and you’ve forgotten what shit even looks like.

Welcome to the Layer Cake son.” - The Layer Cake (2004)

If you’ve been watching Tether lately, you’ll know exactly why this scene hits different.

They’ve left the era of being “just” a stablecoin issuer far behind. In the past few weeks alone, they’ve announced an open-source AI runtime with integrated crypto payments, hinted at a fully U.S.-compliant stablecoin ready to deploy, and acquired a majority stake in a South American sustainable production firm.

None of these are vanity plays. They're bets, serious ones, on a future where sovereignty, infrastructure, and intelligence converge and IPOs still aren’t needed. And unlike most players in the industry, Tether seems perfectly comfortable building that future while regulators, competitors, and critics remain stuck in limbo.

Tether AI: A Runtime for Intelligence That Doesn’t Phone Home

Paolo Ardoino’s announcement of “Personal Infinite Intelligence,” the flagship product of Tether’s upcoming AI initiative, didn’t come with a flashy trailer or hype-laden promises. What it did come with though was something much more captivating: an open-source, hardware-agnostic AI runtime with no API keys, no central points of failure, and native Bitcoin and USDT payment integration via Tether’s Wallet Development Kit. It’s almost too much to fathom for the n00b mind, aka my mind…..

The implications are massive because in a world where every major AI model is bottlenecked by access gates and corporate surveillance, Tether is apparently and ever so quietly laying the groundwork for something entirely different. AI that can be deployed, monetized, and used peer-to-peer without permission.

If you understand Tether’s broader worldview, it fits. They aren’t fighting OpenAI or Google on their turf. Instead, they are building systems that can survive in jurisdictions, geographies, and scenarios where those players won’t or can’t reach.

Still Thinking Locally: USDT2 and the Potential U.S. Play

While the EU hammers out MiCA and Washington argues about stablecoin frameworks, Tether is preparing to launch a fully U.S.-compliant stablecoin, when and if the regulatory environment allows it. The message between the lines is simple:

“We’re ready. Are you?”

This future stablecoin; let’s call it USDT2, will be backed by U.S.-regulated bank reserves and tailored for institutional adoption. It’s the kind of dual-track strategy, offshore resilience with optional onshore compliance, that Circle has struggled to balance, often caught between chasing regulation and losing global market share. In other words, USDT2 is not a replacement for the current USDT. It’s a rail or hedge that will exist in parallel. One foot in the regulated U.S. system, the other firmly planted in the world that Tether already dominates: fast, fluid, and borderless stablecoin liquidity.

The Art of Buying Dirt: Tether’s Stake in South American Infrastructure

Then there’s the move no one expected: Tether buying a controlling stake in Adecoagro, a major sustainable production firm in South America. Goes without saying that this acquisition is strategic. Owning the base layer of food and energy production gives you more than just a balance sheet asset. You should know by now that fiat rails can be censored and economies shuttered by policy; owning productive land and energy infrastructure is a form of institutional sovereignty.

Combine that with the fact that Tether is already holding nearly $120 billion in U.S. Treasuries, and the picture becomes clear: from exporting dollars via crypto to exporting an entire thesis on economic independence.

What Binds It All?

Well it’s definitely not consensus-seeking. What binds Tether’s growing empire is a consistent logic: build tools that work without permission, in places where permission is hard to come by. From open-source wallets and mining pools to tokenized gold and AI agents that can transact autonomously, the common thread is usability, survivability, and sovereignty. As they publish attestations (not billboards), they wait for the moment that’s right, and then they ship.

Most of the crypto world is waiting for regulators to catch up or give the green light. Tether does not wait. And whether it’s AI, land, or a new class of compliant stablecoins, that buidler mentality is exactly why they’ve quietly become the most strategically positioned company in all of crypto.

You could say they’ve climbed a few rungs higher on the Layer Cake; above the noise, above the optics, and far from the permissioned gates others are still knocking on.

I genuinely believe that Paolo Ardoino is up in the rarefied atmosphere, and has forgotten what shit even looks like

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

The launch of Tether AI is the next signal in a broader thesis. Tether isn’t building products, it’s just adding to a digital sovereign stack; one that increasingly looks unstoppable.

Paolo Ardoino’s announcement of “tether.ai” introduces a new kind of AI runtime: open-source, decentralized, modular, and natively integrated with USDT and Bitcoin payments via Tether’s Wallet Development Kit (WDK).

On paper? It’s an AI platform.

In reality? It’s a statement of intent: Tether wants to win the race for infrastructure; money, messaging, mobility, and now intelligence.

What Is Tether AI?

According to Ardoino, Tether AI’s “Personal Infinite Intelligence” is a:

• Fully open-source AI runtime

• Able to run on any hardware or device

• No API keys, no central point of failure

• Modular and composable by design

• Powered by WDK for native Bitcoin and USDT payments

The aim is to create an “unstoppable peer-to-peer network of billions of AI agents.” That’s not marketing fluff; that’s protocol-level ambition.

More than “just” deploying machine learning tools, tether.ai is about decentralizing intelligence in the same way Bitcoin decentralized trust.

Why It Matters: The Strategic Implications

Tether’s roadmap is starting to make a lot more sense when you zoom out:

• USDT - Dollar liquidity rails

• XAUt - Gold-backed hedge for store-of-value believers

• WDK - Developer stack for wallet infrastructure

• OCEAN - Bitcoin mining decentralization

• Tether Energy - Sustainable compute and power

• Tether AI - Intelligence at the edge, uncensored and peer-to-peer

What binds it all? Sovereignty. Self-custody. Global access. Minimal gatekeeping.

Tether is stitching together a permissionless infrastructure stack. From stablecoins to tokenized gold, from open-source wallets to decentralized mining, and now a modular AI runtime, each component serves the same underlying mission: putting power back into users’ hands.

Sovereignty means owning your money, your data, your identity. Self-custody means no banks, no backdoors, no dependence. Global access means a street vendor in Lagos and a developer in Hanoi are using the same rails. And minimal gatekeeping means no KYC fortress standing between you and basic financial tools.

With Tether AI, they’ve just added another layer of tooling for builders. But this time, it’s not about finance (at first sight).

And it’s another clear differentiator from Circle or Coinbase. Those companies are still trying to get permission. Tether is building parallel systems.

This Is Why They Win

Tether gets memetics. They get latency. They ship fast and often, and they’ve leaned into markets others ignored. Lesson learned for perma fudders talking about MiCAH and the implications for USDT. The EU wants compliant, audit-tracked stablecoins, and that’s fine, for the EU. But Tether didn’t build its empire on regulatory appeasement. It was built by solving problems for real users. Skipping MiCA registration wasn’t a blunder. It was a signal. Europe is not the center of gravity in crypto anymore, and Tether knows it. When you’re the base layer of liquidity for emerging markets, black markets, and frontier economies, Brussels isn’t your top priority.

And btw, this AI runtime may not compete with OpenAI on raw capability (yet), but it doesn’t need to. It competes on access, ethos, and alignment with crypto-native users.

If your AI agent can live anywhere, speak to anyone, swap stablecoins, and run without permission, who needs Silicon Valley?

I’ve followed Tether long enough to know that every launch is part of a longer game. As the usual suspects, they’re building a stack for the unbanked, and the uninvited.

The few…..

Freedom Tech Is Awesome

The idea of AI agents tied to peer-to-peer finance, running across modular runtimes, and deployed anywhere in the world might seem far-fetched. But the idea of a stablecoin becoming the largest issuer of U.S. Treasuries once seemed far-fetched too.

Tether doesn’t play by the rules because it doesn’t need to. Maybe that’s why I like them so much. They play to win. And with tether.ai, they’re now playing on the terrain of intelligence itself.

If you’re betting on freedom tech in the coming decade, you could do worse than follow the team shipping at Tether.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

Gold is pumping. Chaos is rising. And for once, the most interesting gold play isn’t happening behind some velvet curtain at a central bank; it’s happening on-chain.

While governments stockpile physical bullion and pretend everything is under control, millions of people now have an option to hedge with a token: Tether Gold (XAUt). The future of monetary sovereignty will live on your phone, not in a vault.

Tether’s CEO Paolo Ardoino said it best: “XAUt opens up the digital gold opportunity to the hundreds of millions of people already using USDt. Inevitable.”

And if you zoom out, he is probably right.

Why Gold, Why Now?

The price of gold has surged past $3,460, fueled by a global appetite for safe-haven assets. Trump telling us we would get tired of winning, inflation uncertainty, geopolitical instability, and central bank diversification away from U.S. Treasuries are all driving this move. China, Russia, and many emerging markets are stockpiling gold to hedge against dollar risk.

Gold still seems to be an undeniable monetary infrastructure.

But while sovereign players snap up 12,5 KG bars, retail users have been left out; until now.

What Is Tether Gold (XAUt)?

XAUt is a gold-backed digital asset issued by Tether, pegged to one troy ounce of physical gold stored in Swiss vaults. Each token represents direct ownership of that gold, with full redemption and transparency.

It combines the stability of gold with the portability and transaction ease of a digital asset.

• Fully backed 1:1 with LBMA-approved gold

• Auditable proof of reserves

• Redeemable for physical gold or fiat

• Runs on Ethereum and TRON, with low transfer costs

It’s digital gold, minus the vault access fees, settlement delays, 12.5 kg weight, and jurisdictional headaches.

A Strategic Move: USDt + XAUt = Full-Spectrum Digital Money

With XAUt Tether is no longer “just offering stablecoins, now it’s offering the same sovereign hedging mechanism that central banks use, but to everyday people. Hence Tether is “the people’s project.”

This creates an elegant financial stack:

• USDt for everyday transacting and fiat substitution

• XAUt for long-term preservation of value and macro hedging

In a time of broken banking, politicized monetary systems, and confiscation risks, this combo provides a stellar “sovereign” product suite.

Most people won’t buy an ounce of gold. Most people won’t open a Swiss vault account.

But millions already hold USDT on their phone. And XAUt can now sit alongside it; instantly accessible, borderless, and liquid.

Tokenized gold isn't new. But distribution is everything. And Tether already has the user base, the liquidity, and the rails to push this globally. Apparently the future of gold isn't in vaults. It’s in wallets.

Tether Gold reflects a shift in who gets access to serious financial hedges. Central banks hoard bullion. Now, everyday people can do the same; digitally, instantly, and without needing a vault or permission slip.

Definitely a nice upgrade to the basic financial stack for people long shut out of traditional finance.

While governments move gold behind the scenes, individuals are adding it to their wallets; alongside stablecoins, not instead of them.

This is what monetary parallelism looks like; happening right before your degenerate eyes.

The only question left is: how long until every crypto wallet comes with a digital vault tab?

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen

You’ve stacked your sats. You’ve secured your USDT. But now what?

In a world that increasingly demands sovereignty and flexibility, it’s time to stop thinking of Bitcoin and Tether as just assets to hold and start thinking of them as tools to live on.

This article is for those ready to take the next step: from passive crypto holders to active crypto users. Whether you’re a freelancer getting paid in USDT, a nomad ditching or at least diversifying your banks, or someone navigating financial chaos in your home country, this is your playbook.

Let’s talk about how to actually spend, send, and survive on the two most essential assets in crypto.

Who Lives on Crypto Today?

• Remote freelancers in Latin America, Africa, and Southeast Asia use USDT to get paid reliably without suffering through bank fees or unreliable local currencies

• Digital nomads living across borders, using crypto cards and apps to live bank-free

• Small business owners accepting BTC or USDT as payment to protect margins from hyperinflation

• Every day, citizens in Argentina, Turkey, Nigeria, and Lebanon store savings in Tether because local banks just can’t be trusted.

People are using crypto to get by, run businesses, and escape broken systems. It’s not hypothetical. It’s happening.

Spend It: Crypto Debit Cards

Let’s start with day-to-day spending.

Many companies now issue crypto debit cards that let you spend your BTC or USDT (or other crypto of choice) at any merchant that accepts Visa or Mastercard. These include:

• Binance Card: Spend USDT, BUSD, or BTC anywhere Visa is accepted. 8% cashback in BNB

• Crypto.com Visa Card: Offers rebates, lounge access, and supports USDT & BTC

• BitPay Card: U.S.-based, supports USDT and BTC, with instant reloads

• Wirex and Nexo cards: Europe-friendly, rewards-focused options

I’m just mentioning these products because they are out there and are the most authoritative. Personally, I do not like Wirex because I have had very bad experiences with customer support. Might have changed since then. Most of these cards convert your crypto to fiat at the time of the transaction, meaning the merchant gets paid in local currency while you live on-chain.

Pay Bills, Rent, and More

If your landlord or utility company isn’t crypto-native (yet), you still have options.

• Bitrefill: Buy gift cards for Airbnb, Amazon, Uber, groceries, even phone top-ups with BTC or USDT. Available in dozens of countries

• Coinsbee: Another option for prepaid cards, subscriptions, and mobile credits

• Spritz Finance (U.S.): Connect crypto wallets to pay credit cards, mortgages, and utility bills

• Pouch.ph (Philippines): For paying local bills with BTC via the Lightning Network

These platforms bridge the gap between your crypto and your daily life.

Get Paid in Bitcoin or Tether

For freelancers and online workers, getting paid in crypto is a no-brainer.

• USDT is the most common method for international payments….stable, fast, and borderless.

• Bitcoin via Lightning is gaining traction for small payments and microtasks

Platforms like:

• Bitwage: Accept BTC or USDT for global payroll

• Request Finance: Invoice in USDT or BTC, paid in a self-custodial way

• Deel: Supports crypto payouts to remote workers and contractors and allows for more creative ways of payments

For small projects, even P2P apps like Telegram or Keet (built on Holepunch/Tether tech) are being used to settle invoices

Move Money Across Borders

Traditional cross-border banking is a mess of fees, delays, and red tape. Crypto does what the banks still can't;

• P2P transfers: Send USDT instantly on TRON, Ethereum, Solana, or even Lightning BTC

• Remittances: Instead of sending money through Western Union with fees, just send USDT to a self-custodial wallet like TronLink or Trust Wallet

• Exchange to local fiat: Use Binance P2P or LocalBitcoins (if available) to cash out when needed. There are (even) more creative ways for the more creative

In places with strict capital controls, this is the way to move money.

Stay Agile, Stay Private

Privacy matters. And while most mainstream options aren't built with it in mind, it's worth noting that of all the privacy-focused projects, Monero remains the most (or only) resilient (option). If the regulatory climate tightens, allocating some funds to Monero could be a smart hedge.

A full deep dive into Monero is probably worth its own article; but for now, just know it's the go-to for anyone serious about transacting discreetly in a tightening financial landscape.

And if you must use a KYC exchange, move funds out quickly after your swap. Assuming your self custodial set up is immaculate.

Real-World Case: Maria, a Copywriter in Buenos Aires

Maria gets paid in USDT by U.S. clients. Her local bank charges 50% to convert USD to pesos.

Instead, she:

• Holds USDT in Trust Wallet

• Spends via Binance Card

• Pays rent by converting small amounts to pesos on Binance P2P

• Buys groceries with prepaid Carrefour cards from Bitrefill

• Occasionally visits a cueva, Argentina's informal black-market currency exchange, to get a better rate for pesos in cash when needed

She saves at least 35% monthly and doesn’t worry about local inflation. That’s crypto in action. VLLC!

Bitcoin gives you sovereignty. Tether gives you usability. The two aren’t mutually exclusive. You can stack sats while living on USDT. You can save long-term while navigating day-to-day expenses. Living on crypto isn’t a fringe experiment anymore.

Stack it. Spend it. Live it.

I love stablecoins, Tether in particular, and I will be writing about the ongoing and ever-increasing future stablecoin war. Stay tuned for insights, drama, and analysis as it all unfolds.

P.S. In case you didn’t realize, I am not Patrick Hansen