Warren Davidson 🇺🇸@WarrenDavidson
What's going on in crypto? Flat or declining markets. Definite vibe shift... A few thoughts.
Markets have stalled, in my opinion, because the disintermediation use case has been effectively destroyed in America. An account-based industry offers no distinct advantage over the status quo. A toxic combination of regulatory and legal malfeasance combined with legislative inertia have caused capital flight and user avoidance - in America.
In 2025 GENIUS Act became law, providing a federal framework for stablecoins. This is an account-based approach, favored by banks, that prevents non-banks from paying interest, fails to protect self-custody and by design enables a "wholesale CBDC".
The wholesale part is cosmetic. On the back end all of the other characteristics of CBDC are being built while the massive deficits that undermine the value of the dollar continue unabated. Stablecoins offer the hope of more demand for US Treasuries, which may help lower rates and more broadly distribute the monetization of federal interest payments on our massive debt and deficits.
Meanwhile, the broader digital asset market still awaits passage of the CLARITY Act by the Senate. Along with providing some overly cumbersome legal clarity for tokenized commodities, tokenized securities, and tokenized real world assets, CLARITY promises to fix some of the deficiencies in GENIUS by protecting self-custody and incorporating other House provisions.
Ultimately, if the Senate even passes a bill, I expect any nod to individual freedom will be cosmetic and pose no meaningful change to the account-based regime.
The future of money will determine the future. Without massive divine intervention, that future looks permissioned, surveilled, and debased.
Remember, the promise of Bitcoin was not an illiquid inflating asset, but rather a permission-less, peer-to-peer payment system. With Bitcoin, no third party could condition your access to your money, and you could move it anywhere at the speed of light. Account-based HODL dominance has led to some useful innovations, but they are highly threatened as already noted, and punctuated by men in jail for writing software to protect self-custody and privacy.
At some point, the industry and government will offer digital ID to grant permission to their permissioned network for money. Do not be deceived; this is a cosmetic illusion of freedom designed to enable more surveillance, coercion, and control.
We need to reject this globalist surveillance state and return to first principles. No government grants you permission to transact, and no government should infringe this right without probable cause and due process.
Returning to this condition requires either a wholesale rejection of the 3rd party doctrine or strong legal protections privacy and decentralized computing architectures (like Bitcoin or ZCash) that build trust in ways that limit surveillance and always protect permissionless self-custody.
I've pushed for such a future since 2017, but most of the momentum looks like account-based dominance with some cosmetic nods to individual freedom.
Digital ID and CBDC pose an existential threat to the future of freedom, and they have more momentum. It would be wise to make a plan to grow and preserve your net worth with that in mind.
You can keep telling your Congress to FULLY ban Central Bank Digital Currency, ban Digital ID, protect self-custody, and guarantee that right to transact is once again un-infringed. It will take a miracle, but I believe miracles still happen.
Happy New Year!
