Clarity in a K-Shaped Economy

Week in Review

Bitcoin finished the week stubbornly battling with $80,000, while ethereum and altcoins went sideways again. The stock market is still reaching for the sky, with the S&P 500 and Nasdaq hitting new all-time highs and the Dow Jones not far behind. Precious metals had down weeks, while oil pushed back toward the $100 mark. Bonds got hammered and yields climbed higher.

The stock market’s parabolic advance to repeated record levels is somehow adding to an unnerving macro backdrop.

Inflation’s path continues to look eerily like the 1970s analogue, and a new worrying statistic about the state of the average person seems to come out every day: Seriously delinquent credit cards have reached 2008–09 levels, the top 1% of U.S. earners now have more wealth than the entire middle class, consumer sentiment has fallen to the lowest level in history, and home sellers now outnumber buyers by the largest gap ever recorded. It’s also been pointed out that if your income hasn’t risen by at least 30% since Covid hit, you are now poorer.

As wealth transfers from wage earners to Wall Street, crypto keeps building. A wall that once stood between crypto and tradfi is collapsing, with the old boundary between “ crypto markets” and “real markets” becoming harder to define.

Binance listing perps for CoreWeave, Walmart, JPMorgan, Visa, and Berkshire is another sign of that. It isn’t just another product expansion; it is a sign that crypto venues increasingly want to be full-spectrum trading venues, where the asset class matters less than the ability to provide exposure to anything with volatility. CZ also mentioned that tradfi is in a race to adopt crypto to lower their costs.

The Chicago Mercantile Exchange (CME) is launching crypto index futures, covering Bitcoin, Ethereum, SOL, XRP, ADA, LINK, and XLM, pushing in the same direction.

That’s why regulatory progress matters so much, and progress is indeed underway. The CLARITY markup was held on Thursday, and the Senate Banking Committee advanced the bill on a 15-9 vote.

Aave co-founder Stani Kulechov sounds optimistic that CLARITY helps DeFi and that the yield question was always somewhat beside the point. CoinShares, meanwhile, tied six straight weeks of ETP inflows in part to improved sentiment from the CLARITY compromise. The optimism hasn’t come easy. Over 130 amendments were filed against CLARITY in what some called a DDoS attack against the bill. 44 of those amendments were from Elizabeth Warren alone, who also warned that the bill would lead to some kind of economic blow-up (or something).

The bill passed the markup stage and will now go to the Senate, likely in June. This is how the adoption process has been in practice: not a revolutionary break, but a long blur.

One of the more difficult aspects of crypto right now is that real progress keeps arriving into an environment that can’t celebrate it cleanly.

Aave liquidity is reportedly back to normal after the rsETH turmoil. The attacker’s rsETH on Arbitrum has been burned, and Stani says withdrawals will normalize markets shortly. That is a major operational recovery story, and one that would have likely been treated as a much bigger victory in the earlier years.

Instead, it lands into a market still struggling to sustain attention.

Consensys delaying its IPO because of weak crypto markets is another reminder that infrastructure maturity does not immunize the sector from timing and sentiment. For all the talk about the future of on-chain finance, public-market appetite still matters, and AI is still stealing the spotlight.

Anthropic is reportedly raising at a $900 billion valuation. The AI bubble and its similarities to the dot-com era continue to be highlighted, though other frameworks suggest that the current froth isn’t as long in the tooth as many believe.

And in the kind of detail that says everything about current capital preferences, it has been noted that literal cows are outperforming crypto.

Bitcoin still has not become the “safe haven asset” some wanted, and for all the progress, crypto still has one unresolved image problem: what exactly it becomes when the world gets riskier.

Ray Dalio, asked why Bitcoin is not acting like a classic safe haven, pointed to lack of privacy. That is one of the more revealing criticisms a macro heavyweight could make. It suggests that even for people who understand Bitcoin’s scarcity, there remains a deeper hesitation around usability under real-world pressure. Dalio also noted BTC’s relatively small market size and its correlation with tech stocks as potential deterrents for serious capital.

Meanwhile, Glassnode’s long-term holder unrealized loss metric is suggesting the bear market is still relatively mild and young. Whatever pain the market is feeling right now, it may not yet resemble the sort of cleansing finality that typically creates unanimous conviction bottoms.

Another odd correlation floating around this week noted that every time ZEC rips this hard, it has marked a top for Bitcoin. Sometimes the haunted folk indicators work, sometimes they don’t.

Besides Zcash and Ansem’s call for $3,000 ZEC, the altcoin world hasn’t really made progress in a long time, at least price-wise.

Jason Calacanis continued his Bittensor campaign, but TAO hasn’t done much since the March rally, and remains well below its all-time highs. TON is apparently the fastest-growing chain over the last month, perhaps thanks to the Durov effect, according to Nansen CEO Alex Svanevik. TON is currently up about 51% in the last two weeks, but it was higher in late 2021.

While altcoins continue to lose mindshare to Bitcoin and stablecoins, a new kid on the block is approaching: Circle’s Arc chain.

Circle reportedly raised $222 million at a $3 billion valuation for ARC, the chain’s native token. Investors included BlackRock, a16z, Standard Chartered, Apollo and others. According to the whitepaper, Arc aims to be the “Economic OS” of the new internet financial system, focused on stablecoins, RWAs, FX and other financial plumbing. In episode 101 of Token Narratives, we hashed out whether ARC is legit or another VC coin that goes down-only forever. The verdict was that we don’t hate it as much as most other token launches.

Circle’s vision of focusing on global financial plumbing may actually make sense, as it’s one of the fastest growing selling points in the digital asset economy. Sometimes markets misprice boring progress. The rails matter more than the memes, even if the memes still get more engagement.

The Central Bank of Iran is now on Arkham, a sign of how legible state-linked on-chain activity is becoming. The ongoing blurring between financial products, tokenized exposure, and exchange infrastructure keeps moving forward even when price action feels uninspiring.

Some crypto bets still look outright ugly, and not everything deserves a silver-lining spin.

Shares of David Bailey’s Bitcoin treasury company Nakamoto (NAKA), have hit another all-time low, with reported Q1 losses of $238 million. Garrett Jin’s $10 billion BTC and ETH stack has reportedly been almost entirely deposited to Binance, which is the sort of movement that inevitably gets CT whispering.

This market has grown less forgiving. Capital wants clarity, not just conviction theater.

-Alex Richardson