…what keeps looping in my head isn’t the dump, it’s BlackRock.

IBIT as their top revenue engine. Not “a successful new product.” Top. Revenue. Engine. Larry goes from “index of money laundering” to “this thing is quietly subsidizing half the product shelf” in under a halving cycle. That’s not a vibe shift, that’s capture. When the world’s largest asset manager’s cash cow is a bitcoin rail, the risk isn’t that they abandon it — it’s that they start lobbying to shape the moat around it.

I keep thinking: when your main profit center depends on a specific market structure — KYC rails, compliant custodians, narrow whitelist of “safe” coins — you defend that structure. So every future “crypto regulation” headline, I have to read as “ETF protection act” until proven otherwise. 🧱

Then on the other side of the screen, same weekend, market pukes. $6K off BTC, $150B “wiped,” total cap slipping under $3T again. Everyone pointing at Japan’s yield shock like it’s the cause, but it felt more like the excuse the system needed. Basis was stretched, perp funding had gone numb, spot books thin. It was one of those days where it isn’t fear, it’s plumbing. Funding flips, structured products auto-unwind, market makers widen or step back, and suddenly people rediscover that BTC still trades as high-beta macro when the machines say “de-risk.”

Funniest part is the timestamps: Japan hikes yields, risk-off cascades, BTC sells off on “Japan shock”… at the same moment Japan is moving to treat crypto like normal investments with a 20% flat tax. Macro says “you’re still just another risk asset”; policy says “you’re now in the same bucket as stocks.” Those two views haven’t reconciled yet.

The Japan tax thing feels bigger than people are giving it credit for. In the 2017–2018 era, their regime basically forced anyone serious to flee: insane brackets, mark-to-fantasy treatment, people selling into December just to pay the bill. Now they’re matching stock rates, separate taxation, less punitive on salaried people. That’s not bullish because of marginal retail traders; it’s bullish because it quietly greenlights domestic infra. Exchanges, custody, dev shops that don’t have to pretend they’re “web services” instead of crypto companies. This is the opposite of the 2018 brain drain.

What nags me is the timing: as Asia (Japan this week, Hong Kong earlier) is structurally warming up, we have these macro shocks that smash weekend crypto books. Capital is being invited in the front door by policy, while getting spooked out of the side door by volatility that still looks like casino leverage.

And then there’s DeFi, having another one of its recurring nightmares.

Yearn’s yETH infinite mint thing — again. Not literally the same bug as old yDAI/yUSD messes, but spiritually identical: composability chains where one mis-specified assumption lets someone print “infinite” synthetics and drain shared pools. Balancer gets hit, attackers pipe $3M ETH through Tornado almost on autopilot. It’s muscle memory now: exploit, scramble a post-mortem, pretend it’s an isolated edge case, patch, move on.

But it’s not isolated. It’s the same pattern that’s been here since 2020: hyper-complex yield systems built atop each other, all implicitly sharing risk via pooled liquidity. If a BlackRock analyst walked a risk committee through how “a near-infinite number of yETH” got printed and nuked Balancer, they’d get laughed out of the room. Meanwhile, the only reason this isn’t front-page fodder is that it’s “only” a few million this time.

And that’s the split I keep seeing more clearly:

On one side: BlackRock ETFs, Japan’s tax reform, Ethereum’s Fusaka upgrade on the horizon, Grayscale spinning up a Chainlink trust — the story of crypto as infrastructure, being standardised, slotted into existing portfolios, nudged into familiar legal frameworks.

On the other: Yearn hacks, Tornado as the default exit pipe, Interpol talking about human-trafficking crypto scam networks spanning 60+ countries. The story of crypto as dark substrate — the thing you use when the rest of your life has gone so far off-grid that normal payment rails aren’t even an option.

Interpol’s report is the ugliest version of that second story. It’s basically saying: all the worst stuff we used to associate with cash-only black markets — human trafficking, drugs, guns, wildlife — now has this additional digital layer that’s global from day one. The payment rail used to be the bottleneck; now it’s the accelerant. People will tell you “but the chain is transparent,” and that’s true in a technical sense. But as long as there’s a Tornado-equivalent somewhere and enough jurisdictional fragmentation, the trade-off criminals see is still favorable.

What struck me is how little those two stories talk to each other.

Larry’s fee engine depends on clean flows, on-chain surveillance, and compliant custodians. Interpol’s nightmare depends on broken states, coercion, and non-compliant mixers. The technology stack overlaps heavily, but the social stack is disjoint. And regulators, unsurprisingly, will use the second to justify hardening the first — while squeezing the middle ground.

That middle ground is exactly where DeFi lives. Permissionless, composable, open to both the over- and under-world, but still trying to be palatable to institutions. Every time a Yearn-type exploit happens and the attacker goes straight to Tornado, that middle ground shrinks a little. It gives the narrative ammo to fold “complex DeFi” and “money laundering” into the same bucket.

My uneasy read: BlackRock doesn’t need DeFi to thrive. It needs blockchains to be stable, surveilled, and cheap enough to settle ETF creation/redemption. It doesn’t care if your yield aggregator survives. In fact, fewer complex public money-legos mean fewer unknown unknowns in the base layer they now rely on. Their incentives rhyme more with regulators than with the anon devs building the next yETH.

Feels like we’re replaying a pattern I saw in 2017–2021 but at a bigger scale: fringe innovation creates narratives and liquidity, that liquidity attracts institutions, then institutions and regulators reshape the field to stabilise their own cash flows — often at the expense of the original weirdness. In 2017 it was ICOs → securities crackdowns → exchanges cleaning up. In 2021 it was DeFi summer → yield farming excess → stablecoin and lending blow-ups → “responsible innovation” talk. Now it’s ETF supercycles and nation-state tax normalization on one side, while protocols still casually blow up and human-trafficking scam farms keep using Tether and random chains as their rails.

Also can’t ignore the price action around all of this. BTC under $87K on a weekend, waved off as macro, but it hits different knowing that under the hood IBIT and its cousins are hoovering up supply on weekdays. The structure has changed: ETF flows during US hours, thinner discretionary flows elsewhere, and weekends dominated by derivatives and offshore. When Japan shocks the system, it’s that latter segment that gets rekt, not the BlackRock sleeves locked into allocation models.

I keep asking: who is actually buying these dips? Because the speed with which perp funding reset and spot bids reappeared doesn’t look like panicked retail. It looks like measured, rules-based capital: the RIA who has 2% BTC in a model, the family office allocating via IBIT across a quarter, the Japanese HNWI who suddenly sees crypto taxed like stocks and feels less like they’re sneaking out to a casino.

We’ve gone from “what if bitcoin goes to zero” to “what if bitcoin volatility blows up my fee stream.” Very different risk conversation.

It’s funny — or maybe not funny at all — that the parts of crypto that get people trafficked, scammed, or hacked are still structurally closer to the original cypherpunk ideals: permissionless access, unstoppable contracts, censorship-resistant rails. And the parts that are making the most money for the biggest players are the most permissioned, surveilled, and intermediated layers on top of that. The economics are drifting away from the ethos.

The line that keeps forming in my head:

The system finally decided it believes in the asset, but it still doesn’t believe in the culture that birthed it.

Maybe that’s inevitable. Maybe in every cycle the “outside” thing that survives is the one piece the existing order can metabolize without changing too much of itself. Gold without gold bugs. Crypto without crypto people.

If that’s where this is heading, then days like this — forced liquidations, DeFi hacks, human-trafficking headlines — won’t kill the asset. They’ll just make it easier to argue that only the BlackRocks and the tax-compliant Japan-style channels should touch it.

The real question I’m left with tonight is whether anything truly permissionless can survive being framed as a risk factor to somebody else’s top revenue engine.

…still thinking about that line: “IBIT is now BlackRock’s top revenue source.”

Feels like it should have been a bigger moment than the chart porn on CT. That’s the quiet flip. When the largest asset manager on earth makes more money from bitcoin than almost anything else… the game board is different. Bitcoin isn’t just “digital gold” anymore; it’s a line item that has to be defended in quarterly earnings. Once something becomes a profit center, it gets a lobby. That’s the part no one’s really saying out loud.

Four years from “index of money laundering” to “thank you for the bonus, IBIT.” I remember 2017 when we were thrilled that a random boutique firm launched a tiny ETN in Sweden. Now we’ve got a $70B spot ETF acting like a cash-flow engine, subsidizing BlackRock’s other products. The customer isn’t the retail guy buying 0.1 BTC anymore. The customer is the fee stream.

And right when that locks in, we get the $150B “wipeout” candle — BTC slipping under $87k on a Japan yield shock, altcoins puking, $600M+ in liquidations, total cap flirting with that $3T line like it’s a tripwire. On the surface, it’s the same script I’ve seen a dozen times: overlevered perps, thin books on a weekend, some macro catalyst everyone pretends they were watching in advance.

But this one had a slightly different texture. Less hysteria, more… resignation. Perp funding flips, basis snaps shut, forced sellers get marched out, and spot bids just reappear from nowhere. That “nowhere” is IBIT, FBTC, the pensions, the RIAs, the boring flows. The guys who don’t care if they bought 91k or 87k as long as the model says “2–3% allocation.”

The market is bifurcating: derivatives still trade like a casino, but under that is this slow, dumb, relentless buy pressure from products that never existed in 2017 or even properly in 2021. High-beta macro on top, bond replacement underneath.

The Japan angle keeps looping in my head. On one hand, JGB yields jump, algos de-risk all “risk” assets, crypto gets hit mechanically. Same old: we’re still on the wrong side of the “store of value vs levered tech beta” debate when the machines react. On the other hand, in literally the same news cycle, Japan moves to a flat 20% crypto tax, treating it like stocks.

Macro Japan says: “this is a risk asset, dump it when yields spike.”
Regulatory Japan says: “this is a regular investment, tax it like equities.”

Those two messages are colliding in real time.

What that flat 20% really does: it removes the punishment. I remember reading about Japanese retail in 2018–2019, forced to sell at year-end to meet absurd tax bills because crypto was treated like miscellaneous income. That tax structure *created* volatility – people had to dump. Now, equal footing with stocks means you can actually hold a cycle or two without the government forcing your hand. No more “salaryman accidentally becomes a tax criminal because of a memecoin.”

This also quietly changes the builder equation. Back then, everyone fled to Singapore or Dubai when they got serious. Now, Japan is quietly positioning as “you can be a normie investor in this stuff and not be destroyed.” If even two or three other high-tax countries copy that, the center of gravity shifts back onshore. 🧭

So on one side: BlackRock milking bitcoin for fees, Japan normalizing it for tax, ETFs hoovering spot on every dip. On the other: $600M in liquidations, altcoins imploding double digits, Yearn getting gutted again by some composability bug, and Interpol talking about human trafficking rings weaponizing crypto scams across 60+ countries.

It’s like two universes sharing a ticker symbol.

The Yearn yETH mess triggered déjà vu. Infinite yTokens minted, Balancer pools drained, attacker pipes a few million through a half-crippled Tornado. The pattern is so old now it’s boring, which is probably the scariest part. The tech stack keeps getting more ornate, more “composable,” but the failure modes rhyme: one mis-specified invariant and suddenly an entire pool is just an ATM for whoever noticed first.

In 2020, those hacks felt like the cost of pioneering. In 2021, they felt like speed bumps. In 2025, with serious capital supposedly circling DeFi, they feel like a brick wall. You don’t get pensions and sovereigns touching that when a single bug can vaporize eight figures and the exit rail is an OFAC-sanctioned mixer. 🚫

And that’s where the Interpol story comes in. Over 60 countries, human trafficking rings using pig-butchering scams, overlapping with drugs and wildlife trafficking. Crypto as the payment layer for the worst parts of globalization. This is the underbelly of “permissionless money” that bull markets conveniently paper over.

2021 regulators talked about “consumer protection” and “investor risk,” but it was mostly about volatility and shitcoin losses. The 2025 tone is harsher: crime, trafficking, war finance, cross-border oppression. If ETFs have given the system a reason to protect certain rails, this stuff gives it a reason to crack down on everything else.

The split I see forming:

– Whitelisted, surveilled, ETF-friendly BTC/ETH rails wrapped inside TradFi.
– Grey/black market rails that keep getting pushed further into the shadows, with Tornado as the recurring villain in every hack story.

DeFi keeps walking into the same tripwire: hacks exit through the same privacy tools that activists and dissidents actually need. The more this happens, the easier it is for regulators to argue those tools are purely criminal infrastructure. They don’t care about nuance when there’s a headline with “human trafficking” in it.

At the same time, the Ethereum narrative is trying to move on: Fusaka upgrade coming, Grayscale launching yet another single-asset trust (this time Chainlink). The protocol wants to be the settlement layer for serious finance, but culture-wise it’s still straddling 2019 DeFi degen energy and 2030 “institutional rails” ambitions. Hard to sell “global financial backbone” when yesterday’s headline is “infinite yETH exploit drains Balancer.”

I keep circling back to this: the safest part of crypto right now, from a career and capital perspective, is ironically the part that looks most like the thing we were trying to escape. ETFs, custodial solutions, broker interfaces, tax-advantaged accounts. Bitcoin as a ticker in your retirement plan, not a sovereign asset you move with your own keys.

And yet, those same flows are what allow the asset to exist at this size at all.

In 2017, the tension was “is this real or a bubble?”  
In 2021, it was “is this tech or casino?”  
In 2025, it feels more like: “is this property of the state, or is it still ours at all?”

The Japan tax move, the yield shock selloff, the ETF fee machine – they’re all pointing in one direction: crypto being metabolized by the existing system. Put inside tax codes, inside ETFs, inside compliance. Clipped and pruned until it looks like everything else.

Meanwhile, the messy parts that don’t fit – privacy, open composability, borderless flows – are being corralled into the “crime” bucket by stories like Interpol’s and exploits like Yearn’s. Same technology stack, different moral framing, depending on who’s using it and how many lobbyists they can afford.

What I can’t shake: every cycle, the thing everyone fixates on is the candles. $6K daily dumps, $150B “wiped,” altcoins nuking. But the real story is always in the friction points where money and law rub against code.

BlackRock’s revenues now depend on BTC trading volumes. Japan’s tax intake will start depending on crypto behaving like a legitimate asset class. Interpol’s enforcement agenda now depends on making examples out of “crypto-fueled crime.” These are slow anchors being dropped into the seabed, defining how far the ship can drift.

Price will bounce. It always does. What doesn’t reset as easily are those anchors.

Feels like we just crossed some invisible line: bitcoin as an indispensable product for the world’s largest asset manager on one side, and bitcoin as a funding rail for the worst human behavior on the other. Same ledger, two narratives fighting for policy oxygen.

The next drawdown won’t be about whether BTC is at $60k or $90k. It’ll be about which story survives in the laws that get written while everyone else is staring at the chart.

…what keeps gnawing at me is how *normal* all of this feels now.

Bitcoin and ETH ETFs quietly pulling in ~$200M in a random session while BTC chops around $87k — that would’ve been end-of-days euphoria in 2017, front-page hysteria in 2021. Now it’s just flow. Background noise. People arguing about basis on X while retirement money dollar-cost-averages into a block subsidy schedule. 📈

The JPMorgan IBIT-linked structured note is the one that really stuck with me. A bank literally selling a product whose implied narrative is: “2026 soft patch, 2028 pump — trust the halving.” They took the meme chart the space has been passing around for a decade and wrapped it in legalese and fees. I keep flashing back to 2017 retail chasing BitMEX screenshots; now it’s private banking clients getting the same story with a prospectus.

What the articles don’t say is the power of *codified expectation*. Once a major bank packages the four-year cycle into product form, it stops being just a pattern and starts being a target. Desk hedging, risk systems, structured payoffs — they all begin to assume a certain rhythm. And once enough money is wired to a rhythm, that rhythm reinforces itself… until it doesn’t.

The danger is obvious: when everyone “knows” 2026 is the dip year, the path that really hurts is either no dip at all, or a premature nuke before the note window even starts. Markets don’t like consensus timelines. My gut says: this is the first halving where the reflexivity is fully financialized, not just on-chain.

At the same time, spot ETF inflows just keep happening. $129M BTC, $78M ETH on the day is not insane, but it’s steady and persistent. That drip-drip institutional flow is the exact opposite of 2021’s “all at once, all the time” mania. It feels like pensions found enough backtests to be comfortable sizing it as a small risk bucket, and now they don’t care about X drama, they just rebalance. I notice myself checking the ETF flows before I even look at the Binance perp OI now. That’s new.

Then there’s XRP.

$164M first-day ETF flows and still getting knifed down toward that $2.20 line. You don’t usually see a product launch of that size fail to overpower liquidations *unless* the real distribution was pre-arranged elsewhere. This smells like classic exit-liquidity theater: get the U.S.-compliant product in place, spin a “new demand source” narrative, then offload whatever you’ve been sitting on since those SEC days while the new cohort buys the ticker.

No one in the articles says the quiet part: if ETF demand can’t even hold a swing low in the first week, whales are almost certainly using the wrapper as a venue, not a destination. I’ve seen this movie with GBTC, with the Canada ETFs, with every region that gets “first access” to regulated crypto. The opening bell is not the beginning for the smart money, it’s the end.

Maybe the clearest sign we’re deep into the “infrastructure consolidation” phase is how boring the real upgrades sound.

Account abstraction quietly creeping into DeFi, making wallets feel less like you’re handling radioactive material and more like—well, apps. Social logins, sponsored gas, pre-signed bundles. None of it pumps the token immediately, so the headlines underplay it. But this is the kind of plumbing that would have prevented half of 2020-2022’s retail horror stories.

Every time I read about another AA deployment I think: they’re making training wheels for the next billion users, and those users won’t even know they’re riding a bike. That’s powerful and a little sad. The early ethos was: “You are the bank. You hold the keys.” The emerging ethos is: “We’ll pretend you hold the keys, but we’ll abstract away the part where you can screw everything up.” Needed, probably inevitable. But another step away from the rawness that pulled me in back then.

And while the grown-ups pour into ETFs and play with AA wallets, the casino layer refuses to die. HYPE, WLFI, ENA ripping while BTC cools off — the same old rotation: majors stall, the “this-one-is-different” narratives get a couple of days in the sun, someone’s up 20x, someone else is down everything. The Trump-linked stuff, the politics tokens, all that culture-war leverage…it has the exact 2016-2017 feel of “memecoin but with *meaning*.” It’s never just about the tech; the speculative animal spirit always finds the new skin to wear.

Pi Network popping 6% on rumors of a big “upgrade” is the echo of every vapor narrative I’ve seen. Those coins that live more in Telegram chats than in actual deployed code. It’s almost comforting in a twisted way: the cycle still needs the pure story tokens, like a control group for human gullibility. 🧪

Monad’s launch getting overshadowed by spoofed transfer attacks was the other thing that made me pause. Another “next-gen L1” with all the right performance buzzwords, and within 48 hours the main story is a UI exploitation vector. We’ve learned almost nothing as an industry about first impressions. You get *one* mainnet launch, one chance to say “this thing works, and it’s safe to build on.” If the first artifact attached to your chain’s name in people’s subconscious is “fake transfer exploits,” that’s a tax on every future conversation.

The irony: the base protocols keep getting faster and more efficient, while the attack surface migrates to higher layers — wallets, explorers, frontends, human perception. It used to be “is the chain secure?” Now it’s “can I trust that what I’m seeing *represents* the chain?” Deep fakes, spoofed txs, simulation attacks… Monad’s story is less about Monad and more about the new direction of risk.

Then there’s KakaoBank and this planned KRW stablecoin. That one hit a different chord. A mainstream Korean bank, not some offshore issuer, gearing up their own won-pegged token. The West still talks about USDC and USDT as if they’re weird hybrid fintechs. Asia looks at stablecoins and just sees *new payment rails*.

This is the quiet fragmentation no one’s really pricing in yet. Not a single global stablecoin, but a mesh of bank-issued national coins — KRW, JPY, SGD, maybe even some EU banks eventually — each wrapped in their own regulations, each with local distribution power. Circle becomes just one node among many. Ark buying more Circle while its stock slides felt almost like a bet on that thesis: “Eventually the market’s going to realize private stablecoin issuers sit at the crossroads of everything.” Or they’re early to a model that ends up heavily marginalized by full-fat bankcoins. Feels 50/50.

I keep thinking about how different this is from 2021’s fintech-wannabe era. Back then it was neobanks putting “crypto rewards” in their decks. Now it’s banks learning how to be stablecoin issuers, and ETFs liquefying BTC into the traditional stack. The integration is running in both directions: crypto infra getting more bank-like, banks getting more crypto-like.

AIOZ’s “decentralized AI with open models and challenges” barely registered on the tape, but conceptually it sits in that same convergence. Training, inference, and data markets needing distributed coordination and payment; tokens giving them a pseudo-native incentive layer. Maybe 90% of these attempts die. But one thing I’ve learned: when a technological frontier shows up at crypto’s door three cycles in a row (DeFi, NFTs, now AI), some version of the mashup eventually sticks.

Ark doubling down on Circle and Bullish while “crypto stocks” slide is classic second-derivative positioning. Everyone is busy trading the coins via ETFs; they’re trying to own the picks-and-shovels of the new financial plumbing: exchanges, issuers, infra. I remember in 2018 when everyone wanted “blockchain not bitcoin” plays. This feels more sober than that; these are actual cash-flow businesses. Still, I wonder if the public-equity wrappers will always trade at a discount to the underlying narrative. Equity can be haircut by governance, by new regulation, by jurisdiction risk in a way BTC itself can’t.

And hovering over all of this: BTC at $87.5k not doing much. ETFs gobbling supply. Halving narratives hard-coded into bank products. Alt rotations doing their tiny, violent circles around the main gravity well. AA silently making things easier while new L1s stumble over old security blind spots. National banks drawing their own borders on-chain via stablecoins. A few AI + crypto projects whispering that the next reflexive narrative wave is already forming under the surface. 🤖

What’s different from six months ago is the *temperature*. Same patterns, half the emotional noise. Institutions are no longer “entering crypto”; they’re methodically carving out their lane. Retail is still here, but it feels more like fragmented tribes than a singular “retail wave” — XRP army over there rationalizing ETF-day red candles, ENA / HYPE folks chasing squeezes, Pi faithful clinging to rumors. The grand unified “we’re all early” story has split into many small cults of “we’re early *to this*.”

I keep coming back to one line in my head:

The more crypto gets integrated, the less it feels revolutionary — and the more dangerous it becomes to underestimate it.

Because underneath the prices, the halving notes, the fake token transfers and the memecoins, the core fact hasn’t changed: we’re teaching the global financial system how to route around trust, even as we hide that fact behind the comforting logos of banks and ETFs.

Maybe that’s what actually defines this cycle.

Not the number that BTC tops at, not whether XRP holds $2.20, not which L1 “wins.”

But the moment people stop realizing they’re using crypto at all.

And if that really happens, I’m not sure whether that’s the victory we imagined, or just the quiet end of the story we thought we were in. 🕯️