The 2025 Crypto Recap & Predictions for 2026

Transcript

The year is coming to an end. 2025 has been interesting year at least you know for the industry also you know for us personally there's lots has happened. What's your um notable memories that sort of stuck out? >> I [music] think so many things that like worked in the past are failing now and it's totally changing. You know Bitcoin really is a sort of viable alternative to fiat currencies today right? So as this like macro hedgeh decentralized like asset like it's really succeeding like on a massive way. Now >> if you look at how banks kind of use the web 3 stack it's it's [music] kind of as a backend upgrade right kind of like it doesn't change the status quo in terms

of distribution and ownership and agency at all. I think that it's entirely possible though that even self- custody in the coming years becomes less and less viable due to regulatory constraints. Welcome to Epicenter, the show which talks about the technologies projectable driving decentralization in the blockchain revolution. I'm Sebastian Couture and I'm here today with my co-hosts Ernst and Brian Crane. So, this is our annual yearly wrap up for the year. Uh, which has been, I guess, um, pretty consistent over the last over the last three years.

Uh, I don't think we've actually missed any of these, uh, recently. So, but um but yeah, we're going to be chatting about what's happened over the last years, notable moments, notable moments for us, but also for the industry, and sharing our hot takes for 2026 and where the industry might be heading. Hey guys, how you doing? >> Doing good. >> So, um yeah, the year is coming to an end. 2025 has been interesting year at least, you know, for the industry also, you know, for us personally. just um lots lots has happened. But um maybe uh before we get started, what's your um perhaps uh it would be interesting for us to each share notable memories or notable moments uh that sort of stuck

out uh this year. This episode is brought to you by Nosis, building the open internet one block at a time. Nosis was founded in 2015 and it's grown from one of Ethereum's earliest projects into a powerful ecosystem for open userowned finance. Nosis is also the team behind products that had become core to my business and that of so many others like Safe and Cow Swap. At the center is Nosis Chain. It's a low fee layer 1 with zero downtime in 7 years and secured by over 300,000 validators. It's the foundation for real world financial applications like Nosis Pay and Circles.

All this is governed by Nosis DAO, a communityrun organization where anyone with a GNO token can vote on updates, fund new projects, and even run a validator from home. So if you're building in web 3 or you're just curious about what financial freedom can look like, start exploring at Nosis.io. Fake, you want to start? >> Uh, there were so many things, right? So kind of I actually wrote the our um end of the year slack post to our to our nosis folks this morning. So kind of I kind of I mentally revisited the entire year and there was so much kind of like starting with the buy bit hack. Um then kind of uh um we had uh kind of crazy

price action um over the summer. Then Poly Market kind of completely exploded into the mainstream and then kind of we went out on um the balance hack in November. Um the kind of to me the thing that stood out most was how much incumbents are actually pressing into the space. Um and how much we are at risk of losing our values or kind of like what most of us kind of uh got into this space for originally. Um, but I'm sure we'll touch upon that in the episode.

>> I think those are all great points. Brian, what do you think? >> Yeah, I agree. I think just overall it's been a weird year as sort of we've had times of especially for Bitcoin, right? Where it's kind of this stuck euphor euphoria. It's going mainstream new alltime high. So I feel like everyone was expecting, okay, this is, you know, this is the beginning of some other epic run and everything is set up and I remember being at the maybe Seleni summit in the summer and you know people were like ah you know it's definitely like you know 160k 200k end of the year and and and then it didn't happen right and at the same time of course you know

bitcoin you know okay it's down a bit I think over the year but I think what has been just brutal and uh sort of devastating for I think a huge part of crypto has been the entire like altcoin uh market and I think so many things that like worked in the past are failing now and it's totally changing. People are kind of maybe still doing some of the things they used to do and they used to work really well and now it's not working and they're like dab it what are we doing? Uh I mean at course one for example one way we've also um you know sort of seen that we just been shutting down a lot of networks right so a lot of networks that

we've been running for years and um you know running early on and just not really working anymore right they they don't generate any revenues just the prices are going down and down activity is not there like you realize that you know in the past they seem to be all abundant right there was a lot of tokens and you know for the team and for airdrop and for validators and for staking and you know for decentralization and like to pay you know and now it's just like let's forget about all of that right let's just try to survive somehow so I think that's probably going to continue right I think is I think a lot of projects and you know and then I think this is both applies to companies

but also to protocols within tokens you know just um on a downward trajectory Right. And that's that becomes very hard to reverse. And so I think we're going to see a tremendous um you know I don't know you know and on the positive side you can say like it's just like spring cleaning and like things are going to go away and obviously some things will will survive and some things will do very well but it's also it's going to be very brutal for a lot of people and yeah and I think that's that's been going on this year and I think it will keep going on next year even if Bitcoin may do like may do very well and and maybe some other things may do very well you know I think on a some macro level I'm like reasonably bullish but I think that kind

of yeah spring fire is is is going to happen and it's happening and and I feel it's also you know I remember like many years ago I used to look at my like crypto investment portfolio and it was like 80% hit rate or something like that like absurd right like almost everything uh I invested in was like up a lot you know like this is you know now it's completely different right now it's like It all it starts to look much more like a sort of normal venture startup, you know, like web two investment thing where like okay, you know, you invest in 20 things and you know, 12 of them fail completely and you know, five of them kind of survive and you know, hopefully

you have like two one or two or maybe three that are actually doing well. for some reason like having a token early on liquidity it gave people the illusion that things were working and they kind of were working maybe from an investment perspective if you sold early but then in the end actually the failure rate is might be even higher right or probably it's going to be even higher in crypto than in like web 2 and I think that's all coming down now >> but do you think the anomaly um is kind of this period that just started or do you think the anomaly was before because kind of if if you kind of look at things that flew in crypto over the years, there were a lot of things that didn't really have a clear business

proposition, right? Where kind of like even if you kind of look at how tokens were designed, typically they were designed to kind of evade regulatory capture. Um, so that kind of like it was clear kind of front and center. This is a governance token only. It gives you no ownership. it gives you uh no right to kind of profits and so on and still they traded at at billions. So kind of I I would kind of make make the case >> because everyone assumed that was just a temporary pretense, right? Then then actually protocol is going to accumulate revenues and then you know you do buy back and burn or some sort of dividend or something, right?

>> I understand that that was kind of part of part of the allure and the promise that was kind of between the lines. If you look at the crazy valuations that some of these had even before kind of they had um proven product market fit um do do kind of I would have made the case that that was the anomaly not what we're seeing now kind of now kind of products kind of have to work as as regular startups would without an infinite amount of money. I I would argue that previously we kind of had the infinite money glitch.

>> Yeah. Yeah. Sure. But like that that I mean you say anomaly but that was really the reality right in crypto for like 10 years right. So I think in the crypto history it was more like the way it was. Uh and I think to some extent you know I feel like we're probably overshooting a bit on the side of you know where's revenues and like everything is crap and I think there was going to be some reversion there but yeah I think it's it's just very different. >> Brian, what you're saying really resonates with me. I was listening to an episode of the rollup uh just recently and the framework ventures guys were on there and what they were saying I think is kind of resonates with that and what I've been hearing throughout the year is

that we're moving into a space now where previously you could invest in crypto and the kind of Ponznomics or the Ponzi metrics were what people were looking for and certainly that provided a lot of that that created a lot of uh returns for investors and for users and retail and people got phenomenally rich. Now we're sort of moving into the space where crypto protocols are going to be judged on their ability to generate revenue um have actual earnings and growth and you know sort of real world metrics and I think it's sort of a sign of an industry maturing uh into something that looks more like a traditional you know fintech or any sort of like tech vertical where businesses that make money are successful return

revenue to investors and dividends. and the uh sort of exuberance that we've seen over the last 10 years in crypto is pro probably or most likely sort of coming to an end or you know at least a slow a slow decline. So for me this year like it's the year started with exuberance and it's kind of ending with consolidation. Um, in the beginning of the year, we had the run-up to the Trump election, uh, Trump getting into office with meme coins and just like insane things that we had never seen before, like, you know, world leaders launching their own meme coins and, you know, getting phenomenally rich and more even more rich from uh, what what is most likely, you know, fraud uh, and corruption to the end of the year where,

as you mentioned, Brian, like a lot of the liquidity that was in uh, alts uh D5 protocols is exiting the market or consolidating into consolidating into assets like Bitcoin and gold, you know, as you mentioned like L L1s have performed very poorly. So like there's been so many big L1s that came out this year that were like people were expecting would be massive like Barachchain and Babylon and Monad. I mean like you know if anybody's bid to a bar chain party or any sort of like uh conference organized by some of these protocols like the promises there were huge but none of them were able to actually deliver on those at least not looking at you know if you're looking at the charts with maybe the exception of like of hyperlquid which falls in that

category of projects I think have you know demonstrable revenue earnings and growth and yeah to me it's just like a sign of the industry maturing. It extends to L2s too though, right? Kind of like if you look at kind of the the hu huge number of L2s. Most of them are pretty dead. I mean, kind of like they they see uh TVL and trading volume and so on, whenever there there are liquidity incentives, but kind of as soon as they're gone, things dry up and the mercenary capital migrates elsewhere right? >> I mean, I think it applies to everything, right? Like I mean the the the token launches I saw some chart right where it was like the token launches this year and it was like the vast majority of them were just like

down right um and and I think that's you know L1's L2s D5 protocols I think it's pretty much across the board I don't know if there's any like category that has really gone the other direction on this and and then I think what's interesting I I do find um maybe one thing that is worth talking about briefly is the Axelar Circle acquisition cuz I do think that is kind of an interesting one. Axelar a project that is reasonably successful. I think I'm not super up to date here on the exact details. I mean I think they're not the number one when it comes to interoperability, right? You have some like layer zero and across I

think that are uh maybe ahead there but they're still like known and respected and even from a market cap perspective you know it was like I don't know 200 million FTV or something around that with basically fully liquid and then you know I think circle basically went and they acquired like the team right so I think that's an interesting case Right? Because you basically I think have their I don't know all the details. I'm speculating a bit, right? But I think you basically have a situation, right?

Where you have this public network and you have this team. They've been working on this for years and like pro, you know, token has been like down mostly for a long time and probably the upside is just not there anymore, right? like the upside is it's like a ton of work and like very limited upside very hard to make work and then you can be like oh or we can just like you know sell the circle and there's like direct cash payment to team and you know maybe the tokens in the network ends up kind of abandoned. I mean, I know there's some other team that's like supposedly taking it over and whatnot, but uh I think that's a interesting one, right? Cuz I think for a long time, people were

always value tokens over equity, right? And token was like the thing was like, well, that's, you know, you much rather go and work for a project that issues a token. You much rather hold tokens if you I mean, for a long time, we even had SAFS, right? You like invest in projects and you just get tokens right now. And then I think that's completely switching as well. >> Yeah, those token holders uh at least in this case I mean I I would suspect we we'll see more uh kind of deals like this in the coming years and this is where you know possibly having equity as well as tokens is is the better play if you're investing. One of the things that as Felica you had written here in the

notes was you know how we've seen incumbents enter the space and do extremely well. So like Revolute and Stripe and you mentioned at the top of the show that you you were worried that some of our values may be diluted in uh in some of this um in some of these developments. I got to say like I use Revolute for like my daily banking here and and um you know the crypto integrations are just like absolutely amazing and when you so contrast that to using like any number of products to get things on and off chain whether it's exchanges or products like Monarium it's just like it just works super well um at least in the case of Revolute you know I'm sure there's like other products out

there as an industry and certainly like as infrastructure what are risks here in terms of this new kind of institutional use of crypto uh whether that's by financial institutions you know in the case of like um large asset asset management firms um or neo banks what's the risk here to the values and the ethos of crypto which is like why we all got into this in the first place >> so I I think um if I were a bank I I I would radically switch to blockchain solutions because They're often resilient and much more efficient than kind of what banks currently have. And that kind of that mostly goes to speak

about kind of like the stack that banks currently operate on, right? Kind of like a lot of it is um I mean it's no no one designed it deliberately badly. It's kind of just the stack that's grown over the past 70 years, right? and kind of um kind of uh doing away with something and kind of and re-engineering it obviously kind of gives you efficiency gains and I have nothing [clears throat] against that and if I were a bank I would do absolutely this the same but kind of the the people who got into crypto for the values so kind of the decentralized ownership um the individual agency and so on we we've kind of seen them kind of struggle for adoption for the past 10

plus years Um and it seems now kind of these web two players come in and they are willing to kind of sell out um their values for adoption regardless of what that means. So kind of and then kind of if kind of if you look at how banks kind of use the web 3 stack, it's it's kind of as a backend upgrade, right? Kind of like it doesn't change the status quo in terms of distribution and ownership and agency at all. And kind of to me, one of the hallmarks, one of the core values of crypto that kind of always really appealed to me was um this promise that you wouldn't have to perpetually

pay rent to the big corporations, but that you could actually own part of Brail. And that seems to have gone out of the window, even for people who I know used to believe this too. Um, and now it seems a lot of people think the only way to kind of get actual users is by turning your back on that in some sense. Maybe that's just me, but kind of that's been my sense kind of also with I mean, we talked about kind of like the the um the demise of many L1 blockchains. That didn't stop kind of like uh the arcs and tempos and so on of the world from being launched, right?

So, there's still there's still something there. there's sort of promise there. Um but uh yeah, that's what I meant earlier. >> I I I feel like I sort of anticipated this happening over the last year or two specifically. I feel like with with regulatory clarity it you know with in the form of Mika or Genius Act or like you know any any kind of like regulatory framework. Um it also uh imposed on protocols a certain number of uh constraints specifically in terms of compliance uh that would you know dilute some of those uh some of those freedoms right that we had on chain previously um

and and I think it's it kind of feels inevitable it like in in a sense where at some point you know when you have an industry that becomes regulated um that that wild best uh era that we all were a part of kind of comes to an end. And I think what one apt analogy is what happened to music sharing where in the late 90s and early 2000s, you know, we could all download music for free online and there was like a huge marketplace for like downloading and sharing music online. Um but it totally undermine copyright law and it totally undermine um uh >> but are the artists better off now?

>> Right. I mean, they're not necessarily better off, right? But but we did get some something in the middle where uh we got the user experience improvements of having access to music uh immediate access to music and like broad music cataloges accessible at any time, but with some remuneration for artists, right? And I think like I'm not an expert on I I don't know like to to what extent, you know, the longtale of artists before Spotify were better off than they are now. Um I think there's also just like a lot more uh artists now that are able to publish music. Um but there is like some concentrating factor I think is what you're alluding to where you know only the top artists make the

most money. Um, and I think probably in crypto we'll have some some similar outcome where you know we benefit from the user experience and kind of like product benefits of blockchain but probably don't get all of the uh decentralization and self- sovereignty and all those things that crypto promised early on >> and the co-ownership right kind of like if you look at kind of for instance ownership my my co-founder Martin recently went viral on Twitter um for something completely crypto unrelated it was um a picture from the Epstein dumps.

He wasn't on it, but Noam Chsky was on Epstein's private jet and kind of yeah, you and 8 million other people saw it. Um and kind of so Martin, who's always been um so kind of he commented it with, "Yeah, this hurts a bit." Um so, uh um he he kind of uh he's always been active on Twitter. He's always kind of had a decent following and kind of like his his tweets actually get kind of get seen by I don't know 10 15,000 people on average but kind of like 8 million. This was kind of he's yeah he he's never had this before and he actually qualified for um the uh for the um influencer program that kind of shares Twitter's

revenue um with you. Do do you know how much you get for a million views on Twitter? $7. it's $7. Um, so kind of so kind of I told him to not spend it all at once, but um it's uh yeah, so kind of and if if you kind of look at the flip side, how much Twitter actually makes from th this level of attention and kind of the ads that they they are capable of of uh uh of selling because of the user generated content. Um kind of this to to me this kind of screams I'm ripe for disruption. kind of like I want um a social media layer that is owned by the people who actually create the value. I

mean obviously it's it's it's dubious how much value was actually created by Martin in this instance but kind of you you know what I mean right? Um so and I think the same is true for Spotify. So kind of you get you get uh fractions of a cent for play on Spotify, right? Kind of like I can pull up the numbers but it's kind of it's it's tiny. Most artists get almost nothing from Spotify. So, uh, and in in and then kind of the question is where where do the profits go? Um, and is is there and to me kind of the the um the promise of web 3 was kind of this disintermediation where kind of you like something online, you you click kind of thumbs up and then kind of like part of the ad revenue that

kind of um create what was was created through you looking at things actually acrewed to that person, right? But somehow um we we we bypassed this and kind of ended up on kind of shinier extractive rails for the incumbents. >> Yeah, it's a good point. I I feel this was always one of the use cases that that felt is so obvious, right? If you could be like okay you can create a social network but then use the tokens to like you know really incentivize the key people who are like driving the growth of these platforms like wouldn't that just be like so powerful and like take off and so yeah I'm I'm I'm kind of surprised that like no one has made that

work because you don't even have to decentralize it right you just use the token for um incentivization especially at this point where the regulatory scrutiny has kind of gone away a bit. So then you know like cuz often we've had that that trade-off right that you're like okay but if you make it decentralized the user experience get worse and now of course we have things like let's say hyperlquid right that are like you know kind of centralized kind of not you know there's some hype middle ground where they actually able to get a user experience that's you know comparable pretty much so yeah I'm surprised that that has not uh taken off and I agree I feel feel There's still something there.

But of course, the challenge is that network of X is so powerful, right? Like to compete with X or I mean even LinkedIn, right? It's kind of a terrible product, but it's so ingrained. And you know, recently I've been like if I I don't use LinkedIn that much, but like sometimes and I would like search in LinkedIn and now it says like, "Oh, we don't show you any search results anymore because like you run out of searches. Uh you need to upgrade." So, it's kind of interesting. It really seemed to like, you know, >> well, if the search works, I'd I'd be willing to pay for it cuz Twitter search doesn't work. Like, like example, I was just searching I was searching for this

for this post and I typed Martin Copelman. I couldn't even find Martin's profile. Um, yeah, I find Twitter search to be like absolutely horrendous. >> This is a place where really we could use um regulation, right? Kind of I I mean, you guys know me. Um but uh kind of uh if if you look at the market uh power that kind of Twitter has just because kind of like they have the distribution um this is u it's it's crazy and in principle we could totally force them to kind of open source um their API so that other people other companies could sit on top of this and for instance um order results differently for you and kind of as is

kind of like you you have two options. one being um kind of see all the Tik Tok like videos you can't you you can't really watch but you also can't look away from on the on the for you page and then the following one um where where you see every little update from everyone that kind of I mean that there should be some sort of curation there should be some sort of um way of um kind of letting you choose how to curate these results and in principle um I I think regulatory bodies could force social networks to open source um the the these uh these APIs so that other

people could sit on top of them. Um but somehow this is something that's not done right. >> Yeah. So Brian, uh back in um back in I think it was when was it April when we were in Dubai for um for Staking Summit, uh we did an episode with uh with uh uh Mirao and Toby and we talked about the staking ecosystem and I thought one of the interesting things there was, you know, discussing how um staking was consolidating on practically all all metrics.

U so I wonder you know like several months from away from that if you think that that has actually materialized and uh if uh if that consolidation in this e sticking ecosystem is actually happening. Uh so I think it is happening. It's uh but I think it's probably still somewhere on the road right I mean I think it still has a long way to go but you know I think at the core what what is going on first of all you know I think distribution is just crucial right like if you own the distribution then you have kind of like so much leverage and when it comes to the revenues that like staking generate

those will just really acrue to those who own the distribution. So what is that? That's like, you know, companies like Coinbase, right? Or Revolute or maybe ETF issuers or centralized exchanges, you know, I mean, potentially some wallets, right? But basically, you know, the bigger you are, the more distribution you have, like the better you can monetize this. And if you don't have the distribution, then you are going to have to basically sell or be a service provider to those who do have the distribution. And then you're going to be competing with, you know, 10 others that are also trying to sell to those and then you you just don't have a ton of leverage, right? So the pri you're going to be, you know, you have

not a lot of pricing power. So I think that is something that certainly applies to staking. Uh but I think it applies to probably quite a lot of other areas as well uh in crypto. And yeah, so I I do think that you know what we see today. I don't know what the answer for this is, but like what if if you take all of the profits that are being generated in crypto, how much of that acrru centralized exchanges is going to be very large. I think of that how much accused to binance is so large like I would not be surprised or I mean I my guess would be that probably more than half of like all of the profits in crypto are like Binance, you know. H I mean of course there's there's well

there's different there there's also the profits from like you know coin appreciation right like so those if we exclude that I mean I think it's going to be a gigantic percentage right it's going to be some of those centralized players and so I think that's just a very uh I think it's going to be strong consolidation right where a lot of it is going to go there of course you have some new players there you know the Robin Hoods the revolutes and and and they have a tremendous power as well so I think you going to see those uh integrate as well. I think what we also seeing um you know I did a podcast with Gracie from BitGet yesterday. a recorded one and I think what bigot is doing which is

again very typical for I think a lot of exchanges are doing that you know they're one they're kind of integrating DeFi right so you they kind of say like okay look you have your centralized exchange interface and you know you can do a lot of things there and including maybe we kind of package some of the you know defi access into that as well so like you never have to leave I mean Coinbase did something with morpho as well right so I think that so that's one thing and then of course bringing like stocks and commodities in and be this kind of universal trading platform and and that's super powerful right I think and and so I think that kind of consolidation yeah it's it's very very much happening and I think will will

continue to happen >> are there other parts of the industry that we see consolidating over the next you know 3 to uh 3 to 5 years um possibly venture capital, right? I mean, a lot of the uh rounds are continue to be sort of taken up by large uh VC funds. Uh it's becoming harder and harder for for smaller funds to raise. Uh there have been like fewer fund launches in the last uh year. I I think I mean I don't have actual metrics here, but just um I think I've seen some some metrics where like have been like fewer fundraises than um than in previous years and certainly like VCs are finding it harder and harder to raise. you know this consolidation hap is happening like

across all souls of the industry. >> Yeah. Now VCs I don't know I don't think VCs really like naturally suited for like consolidation. I think there you just have a shrinking of the industry right like basically returns are not there. So you know like what does it mean? I think that the more established funds mostly even them right raising smaller funds right so I think um even the very very big ones I think have shrunken and then the small ones a lot of them just cannot raise yeah but I think consolation will also apply to all of this you know data analytics block explorers like all of these kind of services and layers that people like this whole like middle layer I think

will will there will be a lot of consolidation there >> I fear You're right. If web 3 in some sense kind of becomes a speculative asset only that's powered by centralized exchanges, what remains? >> I there was a nice article I think from Nick Carter recently where you know he was like how is this crypto thing doing? And well first of all you know Bitcoin really is a sort of viable alternative to fiat currencies today right? So as this like macro hedge peerto-peer decentralized like asset like it's really succeeding like on a massive way now okay maybe we touch on the quantum thing later so there's some threats it

may end up failing like it's possible right it's not guaranteed it's going to win but today like I think the sort of default like if nothing goes wrong it it is is going to be there right it's going to be like a major factor in as a macro asset And that's very powerful I think. So there's that you know I think we have like stable coins payments right like it's great right like actually has a lot of benefits you know I think you have access to financial products like more financial products easier more efficient right you have may have some kind of back backend efficiency gain for like I mean you said before right if you're a bank you build on blockchain right which you know I think to some extent is

definitely going to happen and happening so I think there are a lot of real improvements and real value here you know maybe some aspects like regionally that attracted some of us like you know self custody all right and the idea of having like P2P you know no intermediaries and having peerto-peer transactions and maybe having privacy onchain privacy like those all you know not doing super hot right now and questionable if they'll if they'll end up sort of being delivered at all. But even even then self custody is an option, right? Like you can do it and a lot of so that's already powerful.

So I think if you zoom out it doesn't look so bad even you know but but of course trading is by far the main use case and and so I think decentralized exchanges just are extremely well positioned there. >> Entirely possible though that even self custody in the coming years becomes less and less viable due to regulatory constraints. So my my fear like I think in the next like three to five years is that possibly in Europe self-custody becomes mostly untenable due to regulatory constraints which would prohibit people from uh with that have self-custody assets from interacting with any centralized exchanges or at least being like significantly hindered in doing so.

>> How do you think this would play out? because kind of uh it to me it seems like um the genie is out of the bottle and kind of you can't really put it back in and um kind of drafting or trying to enforce regulation that is de facto uninforcable just makes you look bad as a regulator slash an enforcement agency. in in the EU we've already there's already been some talk about like having a much higher increased scrutiny on self on self-custody wallets like unhosted wallets uh like this is this is part of the EU regulatory narrative and I don't think it's impossible for uh regulation

to impo like regulation to impose much higher scrutiny on on self-hosted wallets such as like you know like source of funds like traceability of like when those assets were purchased, etc. And if they're not, then it's like nearly impossible or like impossible to interact with any regulated exchange. >> But I mean, this is already the case, right? Kind of like if you kind of want to bring funds onto an exchange, they already check kind of what the funds have been through in the past. Um, and I mean this is this doesn't really seem to impede usage a lot. No, >> I mean it's like an extra it's like an extra burden on people who have un quote unquote unhosted wallets. I just think

it's not past the EU regulatory apparatus to impose even more stricter constraints on on those types of wallets in the future. So let's talk about the quantum threat. So we recently did this episode on the quantum threat to Bitcoin and also crypto as a whole. And we were discussing before the show that one of the interesting developments in the last say like 6 months is that you know before this wasn't discussed at all or it was kind of like dismissed as something that was going to happen so far in the future that we shouldn't actually be worried about it. But now it seems like that conversation is happening in a more serious and significant way. And I know Brian you're tracking this pretty closely. What's your Yeah. What the risks are here in particularly for Bitcoin? like what's

the situation look like and um what can we what what do you think is going to happen in the next few years with regards to quantum and crypto? >> Yeah, I mean I have not spent like that much time on it actually. John Lilage that we did a podcast with has I spoke with him at EFCC in some length about it and he's like super focused on that and then you know I was talking through it with him and it was like and so I spent a bit of time on it. I mean, I think for anyone who is interested in it, uh, I think Nick Carter wrote a really great article very recently about uh, the risk for Bitcoin.

So, I I recommend checking that out. But on a high level, right, what's the what's the issue, right? It's a it's a simple issue, right? Like basically in Bitcoin uh or in crypto, you basically have a public key and you have a private key and then if you want to create a transaction, you you you sign a message with the private key and someone else can verify that that message was probably written by this private key, right? Or signed by this private key. But there could be other private keys maybe that could also uh sign a message that would sort of verify. It's just that statistically speaking, it's like so implausible that you'll ever find it that you can basically say that risk is

zero. And so then you know you kind of as long as you have your private key, you're safe. But I think with quantum the thing is that what people expect is that they will start to become possible to sort of crack brute force, right? And and create a transaction that will spend the coins from uh from some address you have and without having the private key. So then somebody could just steal the bitcoins. Now I think there are address types or you know um some cryptographic signing types even supported in bitcoin that would uh not have that vulnerability. So you know there's like some upgrade path maybe possible right where you say like hey let's switch all

switch to that and then people may have to move over their coins if they're on addresses that are still exposed. Uh but the problem of course is first of all it's a huge upgrade and Bitcoin has been extremely resistant to any kind of upgrades. I mean some some people may remember the block size debate which was a huge debate took forever. It was extremely hostile. A lot of people left the industry left Bitcoin even as a part of it. uh you know to basically increase the block size from one to two megabytes which was a very very minor change as about as minor as you can think of a change and um and but the other thing is what do you do with like let's say

Satoshi's coins right because if somebody now steals even if you you know maybe Seasia moves to a quantum safe address you know if someone now steals I think the estimates like 1.7 million bitcoins they're kind of like lost or like haven't moved forever. So someone sees that and then dumps it all. That's like, you know, it's super massive disaster. Totally wipe out the Bitcoin price and maybe not go to zero, but go like, you know, I don't know how low it will go. Go very very low probably.

Yeah, it's a big threat in in sort of the traditional world. People are very aware of that, right? And there's, you know, I think any bank will have some quantum group that's like preparing for it and, you know, they will make these migrations and changes. But that's like way easier to do in a centralized system than in decentralized system. In a decentralized system, you know, if you have some governance, if you have some kind of coordination, then again, it should be possible to to make some upgrades. still probably harder and still some risks. But of course, Bitcoin is so resistant to any kind of change and V has no governance process. It's going to be way harder for uh Bitcoin than even Ethereum for example, right?

Ethereum is going to have an easier time adapting to that than Bitcoin. So, it's a very big threat and uh it's interesting that now kind of now of course the big question is the timeline here. How long is it going to take? Hard to know. I think the median estimate is something like early, you know, maybe 10 years from now. But um first of all making these changes and upgrades to Bitcoin is also probably going to take many years and second of all you may have some breakthroughs and it could come much earlier and you also have an incentive if you are now developing the latest quantum computer you may want to keep that a secret right and only sort of when you're there uh then you announce it and then you have a huge

head start. So yeah, there's a lot of risk there and when it comes, you know, it's maybe too late. So it's a it's a it's a very hard problem I think for Bitcoin to tackle and I think it's a problem for I mean I remember talking with John and he was also very unhappy with Ethereum and you know I think he also thought Solana was making mistakes that would make it hard afterwards to adapt. So, I think he does think there are problems and and I'm not as familiar with the details here, but that, you know, there's real problems for other blockchains as well, but I think Bitcoin by far has the biggest pro problem here.

>> Yeah. One of the things I I thought interesting about Yeah, that's a great great recap. Um, but one of the things I thought was interesting about Nick's article is the Bitcoin community essentially has a choice uh to make, which is essentially, you know, make the upgrade that would uh render Satoshi's coins unspendable, you know, and therefore threaten the neutrality of Bitcoin and and tank the price or do nothing and wait for the quantum threat to come. You know, Satoshi's coins get the private keys get uh deciphered and uh those coins are sold and that tanks the price. So it's they're sort of stuck between a rock and a hard. I mean I think if you ask me you know what would be the best thing is like you take the you basically give some timeline of I don't know two years you say okay in

these two years you have to move to some address that's like you know quantum resistant anything that does not move basically goes into like a security budget and now Bitcoin has like you know 2% annual like inflation for the next I mean many many years right or like you you could basically the whole thing of like the security and the block rewards like dropping off so much you can kind of uh undo that which I think um you know >> that's very unpopular matter.

>> Yeah, exactly. So kind of I think this is something that might fly in the Ethereum space kind of like kind of like the worst I could kind of the the furthest I can kind of see this happen in the Bitcoin space is that people kind of say okay whoever doesn't move their their coins within two years or so kind of they just get burnt or kind of like they no longer get I mean but um kind of actually kind of putting governance on top of all of this. So kind of like >> inflation. >> Yeah. This is like is like these you still have the 21 million limit right like >> right right >> uh >> yeah but yeah >> is it likely to happen like it's hard to imagine it right now right now I mean by

far the most likely scenario seems to be that nothing happens right that like no real change comes uh but then >> I don't I don't think that so maybe I'm just kind of like more optimistic venue here. So I think kind of like the the the block size was it also ultimately didn't matter that much, right? Kind of like it was was a question about kind of transaction fees kind of like when it when it came down to it and kind of like whether blocks still propagate fast enough and and so on. But if there's an existential threat kind of as for instance posed by the by by the uh quantum collapse, I do actually think that the ecosystem would be rational

enough to coordinate around that. And I mean if if you kind of when it comes down to it kind of you have governance by uh by hard fork, right? um kind of you could say okay look kind of like we'll hard fork this and everyone who thinks this is this is uh Bitcoin and this is now Bitcoin classic and kind of Bitcoin classic will go to zero eventually. I think they wouldn't sink for dogmatic reasons alone. I know and like a lot of Bitcoiners. So maybe I'm I'm biased here, but uh >> I I think this this scenario they're describing, Fica, is probably the most likely scenario where there, you know, there's part of the Bitcoin ecosystem that decides to kind of move forward

with a solution and there's one and like the size of that part of the ecosystem that would fork off to become the classic, right, is is questionable, but most likely like it would be contentious. Uh >> yeah. Yeah. hard times. >> Yeah. >> Yeah. But the hard forks, right? The last I mean there hasn't been a hard fork for like almost ever, right? I think the first ones the changes were soft forks later. So even that >> those were like >> Sure. Sure. I mean some people made hard for made but that they were not Bitcoin right like Bitcoin itself has not uh done that. I mean I I think one one of the things we we haven't really talked about here is like you know recent the recent uh kind of narratives around

Zcash and I feel like this is this is a it's it's a it's great use case for Zcash because Zcash uh has a lot of the properties of Bitcoin I think has the respect of a lot of Bitcoiners as a you know first primitive uh highly decentralized um highly aligned asset that also is private it and happens to be quantum resistant as far as I understand. >> Yeah, for sure. Should everybody just like swap their bitcoins into Zcash, you know, like Yeah, just uh >> yeah, something like Zcash Bitcoin >> something like Zcash could be very well positioned there. I agree. Or like of course Bitcoin in the end someone will

do the Bitcoin hard fork, right? To say like, okay, let's you know, freeze the old coins and you know, um my great dad. But the challenge is just going to be you know you may end up with two or three or different views on it and then you have like different forks and which one has the legitimacy right which one is actually Bitcoin right that's the challenge right and especially now you have the Bitcoin in ETFs and Revolute and like a lot of these places that they will have to make the decision for the users and that hold all of it like yeah but the one that goes euro is not bitcoin huh the one that >> the revolutes the the revolutes can just decide to like keep all of them and then

like they're going to get the they're going to get all the assets on for. >> No, no, I don't agree with you because like someone comes in and they say like I buy Bitcoin, right? They they're going to give them, you know, they're going to have to say this is Bitcoin, right? This is that not going to be like, oh, listen right >> but they can also offer bit. I mean, they of course they can offer Bitcoin, but they can also offer Bitcoin Classic and whoever wants I mean they're going to they're going to make money off of this anyway, right? So like just like exchanges listed Ethereum and Ethereum Classic and continue to list Ethereum Classic. But but yeah, I guess I guess what you're saying is uh the the exchanges will have to decide which which is like the the real Bitcoin. I've

been thinking about this throughout the episode. I think my my hot take is that despite all of this consolidation and apparent uh shift away from Ponzenomics and uh the industry moving towards investing and certainly you know backing projects that uh demonstrate real world metrics such as revenue and earnings. um we are probably going to continue to see rallies possibly not of the of the you know the sort that we've seen up up until now like the memecoin rally etc but like we're those rallies will continue to happen on a smaller scale and people will continue to um you know gamble on things like memecoins and

other uh narrative driven ideas um and you know retail investors will continue to uh get burned on those as they have in the in the I mean, retail investors tend to get burned whatever they do, right? I'll impersonate Warren Buffett here. Um, I I think >> Can you do Can you do his voice? >> No, unfortunately I can't. But you you you maybe we can put this in with AI. Um, I think real world assets are going to be all the age. So, I think kind of like we we now kind of the the one thing that has arguably kind of found real world traction is stables um kind of nonspeculative real world traction stables. So I think real world assets is

is next up and kind of we see a lot of the infrastructure and I expect that 2026 will be RWA all the way. >> Yeah, I agree. I think per trading is uh seems like very powerful and uh so I think per stocks and per I think that thing is going to keep exploding and uh and I think that's that's going to be very powerful. could bring a lot of money and users into crypto. And so overall, I I think 2026 is going to be a better year, right, than 2025.

Uh I don't think it's going to be some like long bare market from here, but I think it's going to there's going to be still a lot of struggle for a lot of pockets of crypto. All right. Well, we'll we'll have to see if those predictions pan out. Uh but uh to all of you listening, thanks for uh tuning in and certainly for tuning in to Epicenter throughout 2025 and hope you'll stick around for 2026 as the industry continues to evolve in all sorts of interesting ways. And certainly happy holidays and happy new year to everyone.