Empire
December 19, 2025

Is 2025 Crypto's Dot-com Moment? | Weekly Roundup

Crypto’s public markets feel terrible, but the underlying adoption is surging. This episode unpacks a critical divergence: while token prices languish, real-world utility and institutional interest in crypto infrastructure are accelerating, mirroring the internet’s post-2000 bust. The question isn't if crypto is building, but where value will accrue.

The Great Decoupling: Adoption vs. Price

  • “It is very possible that we have two years of choppiness and underperformance of crypto relative to everything else while we have a lot of adoption.”
  • Echoes of 2001: Crypto's current state resembles the internet post-2000. User adoption soared (300 million to nearly a billion in three years), yet stock prices plummeted 75%. Today, corporate tokenization and stablecoin usage are promising, but public token sentiment is a lagging indicator.
  • Capital Flight: Institutional capital is currently flowing into private AI deals (e.g., OpenAI, XAI, SpaceX raising at massive valuations), diverting high-risk funds from public crypto tokens.
  • Regulatory Drag: Regulatory uncertainty and a fundamental misunderstanding of token economics (equity vs. utility) deter traditional allocators from public tokens, pushing them towards private crypto equity.

Dot-Com Redux: Bifurcation and Opportunity

  • “After the dot-com bust, you saw this very stark bifurcation. A lot of the pure-play dot-coms basically just went to zero… But there was this small subset of profitable or structurally advantaged internet and tech platforms that so massively outperformed over the following decade.”
  • The AWS Parallel: Just as AWS emerged in 2002 to provide scalable infrastructure for Web 2.0, maturing crypto infrastructure (wallets, on/off-ramps, abstraction layers) enables new applications. Value accrual might favor these foundational service providers.
  • Private Market Strength: Traditional allocators are returning to private crypto markets, funding stablecoin, tokenization, and exchange companies. This suggests value is accruing in private equity, not necessarily public tokens.
  • Winners and Losers: Expect a "graveyard of losers" but also a small cohort of "compounders" that will generate outsized returns, similar to Amazon, Microsoft, and Apple post-dot-com.

Stablecoins and On-Chain Infrastructure Drive Real Use

  • “Visa stablecoin settlement pilot just hit $3.5 billion annualized run rate. That's not a test anymore. That's a market signal.”
  • Visa's Signal: Visa's $3.5 billion annualized stablecoin settlement volume is a clear market signal. This enables 7-day-a-week commerce, a significant upgrade from traditional banking hours.
  • Coinbase's Play: Coinbase's custom stablecoin offering allows businesses to issue branded stablecoins for loyalty, treasury management, and cross-border payments, leveraging USDC infrastructure for efficiency.
  • Vaults as Asset Management: On-chain "vaults" are evolving beyond simple money markets into actively managed strategies and structured products, attracting interest from large asset managers seeking new LP bases and unique blockchain-native capabilities.

Key Takeaways:

  • Strategic Implication: The crypto market is undergoing a structural re-rating. Focus on companies building essential infrastructure and solving real-world problems, not just speculative tokens.
  • Builder/Investor Note: Private crypto equity is attracting significant capital. Builders should focus on full-stack fintech solutions and direct customer engagement. Investors should identify structurally advantaged companies with clear business models.
  • The "So What?": The next 6-12 months will see continued decoupling. A potential softening of AI hype could redirect capital, but the long-term winners in crypto will be those providing tangible utility and robust infrastructure.

Podcast Link: https://www.youtube.com/watch?v=0xfJHy3F0Gc

This episode exposes crypto's dot-com paradox: surging adoption clashes with plummeting public token prices, as institutional capital aggressively re-routes to private AI ventures.

The Dot-Com Deja Vu & Market Disconnect

  • Santi highlights the internet's 2000-2003 growth, where users tripled (300M to 1B) while stock prices fell 75%.
  • Rob notes current unrealized crypto losses are the second highest ever, near FTX collapse levels, indicating continued capitulation.
  • Many crypto networks remain overvalued, contributing to the price-adoption disconnect.
  • “It is very possible that we have two years of choppiness and underperformance of crypto relative to everything else while we have a lot of adoption.” – Rob

AI's Capital Magnet & Nvidia's Crucible

  • OpenAI is reportedly raising at $750 billion, xAI at $240 billion, and SpaceX at $1.5 trillion, attracting substantial institutional investment.
  • Rob observes investors perceive AI as having the "same reflexivity" as 2021 crypto, driving rapid capital allocation.
  • The AI industry's future depends on Nvidia's Blackwell GPUs (next-generation architecture after Hopper) demonstrating clear economic returns post-2026.
  • “If the ROI disappoints from Blackwell, it all crumbles.” – Rob (quoting Gavin Baker)

Coinbase & Visa Drive Stablecoin Utility

  • Coinbase launched custom stablecoins (white-label, USDC-backed), prediction markets, and DEX trading, expanding its institutional offerings.
  • Visa's stablecoin settlement pilot hit $3.5 billion annualized volume, enabling 7-day-a-week settlement for US partners via USDC.
  • Rob explains Visa's direct settlement is its fastest-growing segment, projecting its stablecoin volume to reach $100 billion next year.
  • “The amount of announcements that are going to come out that look exactly like that are like probably in the hundreds... over the next nine months.” – Rob

The On-Chain Vault Revolution

  • Morpho, Aave, Stakehouse, and Gauntlet lead the vault market, which is attracting interest from major asset managers.
  • These vaults are evolving beyond simple borrow/lend to actively managed strategies and structured products.
  • Santi notes vaults are essentially "asset management with a different LP base," aiming to capture crypto wealth.
  • “We're moving on chain. We're moving into Morpho and we're going to spin up these vaults.” – Anonymous Asset Manager (via Santi)

Token Economics & Regulatory Headwinds

  • Recent acquisitions (Circle/Axelar, Coinbase/Vector.f) often target teams and intellectual property, ignoring underlying tokens.
  • Rob attributes this to regulatory uncertainty and a "fundamental misunderstanding of what a token is" within the industry itself.
  • Public token volatility deters institutional limited partners (LPs), pushing capital towards private equity in the crypto space.
  • “There's a fundamental misunderstanding of what a token is... why should you if you basically have no rights and there's a disconnect between the equity.” – Rob

Investor & Researcher Alpha

  • Capital Reallocation: Institutional capital is aggressively flowing into private AI rounds, creating a temporary vacuum in public crypto markets. Monitor the 2026 Nvidia Blackwell transition as a critical inflection point for AI's long-term capital validation.
  • Stablecoin Infrastructure: Visa's rapid adoption of stablecoin settlement (projected $100B in 2025) signals a massive, under-reported shift in global payments infrastructure. This validates stablecoins as a core utility layer, not just a speculative asset.
  • DeFi Vaults: Traditional finance is entering DeFi via "vaults," creating new demand for on-chain structured products and active strategies. Research protocols facilitating institutional-grade asset management on-chain.

Strategic Conclusion

Crypto is navigating a disorienting period of high adoption and low public prices, mirroring the dot-com bust. The industry must deliver clear economic value and regulatory clarity to re-attract capital from the AI boom and solidify its foundational infrastructure. The next step is proving token utility and integrating seamlessly with traditional finance.

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