🌱 Green shoots

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Prepare yourselves. 

No, really, it’s not going to be a pretty day if this morning is any indication. Jim Cramer is predicting some Black Monday-esque market action in equities, and Pershing Square’s Bill Ackman is sounding the alarm over on X. 

It’s very noisy right now. So take breaks and go touch grass.

We’ll talk more about what’s happening below, but the crypto bubble hasn’t completely burst yet. And there are always green shoots to watch out for.

Meanwhile:

• Bitcoin has tumbled to $76,000, a 7.5% decline in the last day, while ETH dropped 17%, falling below $1,500.

• Total liquidations in the past 24 hours are at $1.4B, per CoinGlass data.

• The total crypto market cap has tumbled 7.7% to $2.48T over the last day.

🐮 Making a bull case

It’s hard to escape the doom and gloom headlines — and price action — but what if I told you that real-world assets are still looking good?

Before we get into that, I did want to touch on bitcoin’s price action yesterday. There had been a lot of hope that Friday’s lack of a selloff meant that crypto and macro weren’t walking down the same path arm-in-arm. Unfortunately, because bitcoin is still at least somewhat of a risky asset, it has been caught up in the tariff-driven selloff, falling just under $80,000.

Ledn’s John Glover thinks we could see two scenarios based on his technical analysis: one where there’s a bounce after it hits $76,500, and another where momentum picks back up after we carve out a $73,500 low. 

Okay, now that we’ve gotten our short market talk out of the way, let’s refocus on RWAs. 

A report from Centrifuge and Keyrock believes we could be looking at three different cases for tokenized private credit. 

Mind you, the aftereffects of the tariffs and potential economic repercussions could have a previously unforeseen impact. It could make it more difficult for us to see the bull case play out, which would see $17.5 billion in total value locked. This would be “driven by increased participation from both traditional finance (with traditional loans stored on-chain)” and boosted with DeFi integration. 

A base case would be $15 billion in TVL, which would essentially be driven by continued adoption. Think of a long-haul train just chugging along: nothing super exciting, but also still growing, even if it’s at a slower pace than some would want. 

And then you have the bear case, which would see $12 billion in TVL. If bad economic conditions dampen the bullish attitude in crypto and force a bear market, then this would be the so-called worst-case scenario for RWAs, per the report. 

“A downturn in overall crypto market conditions could lead to higher default risks and a reduced demand for loans, as seen in previous years where private credit platforms suffered from defaults,” the report said.

Centrifuge CEO Bhaji Illuminati told me that she’s feeling pretty positive about RWAs right now — specifically, she feels we’re sitting at an inflection point. We’ve got regulatory clarity on the horizon, and there are roughly four areas of RWAs that could see a boost in adoption across the board. 

Those would be US Treasury securities (which includes stablecoins), tokenized equities, commodities and, of course, private credit. 

To be fair, this report was penned before we knew about the tariffs looming on the horizon, but it doesn’t mean that we couldn’t still see modest growth even if it’s a bearish environment.

Summing up the various sectors that make up tokenized assets, the report found that the bull case “driven by regulatory tailwinds” could see RWAs increasing to $50 billion. That figure would see “the increasing composability from the DeFi side and appetite from institutions to tokenize existing offerings.”

“Even in a base case, our outlook is extremely positive, predicting $30 [billion] due to existing improvements in regulation and architecture,” they continued. 

And, as you can see above, a bear case also sees some, albeit modest, growth. 

To put this into perspective: Total RWA on chain sits at $19.6 billion, while total stablecoin value is $227 billion, per RWA .xyz.

Anyway, there’s your dose of hope this morning.

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• Tether’s mulling a US-only stablecoin as regulators and legislators work on a framework for such assets, the Financial Times reported. 

• Standard Chartered thinks bitcoin’s a hedge against tariff risks. 

• Many current stablecoin offerings aren’t securities, the SEC clarified.

⭐ Be careful what you wish for

Ethereum co-founder Gavin Wood joined the Empire crew on the podcast this week, and he had some spicy takes about the industry. 

Wood thinks that while some projects still embody crypto’s original dream and original ideals — you know, freeing us from the shackles of the traditional financial system, banking the unbanked, etc., etc. — the majority, unfortunately, are just chasing the hype.

But he’s not jaded enough to leave the industry, he told co-hosts Jason Yanowitz and Santiago Santos. Wood still thinks some projects and founders are pushing the industry forward, though he leans towards labeling himself as focused on Web3, not crypto.

“ Web3 isn't this industry, right? It's a part of it, but it's not all of it,” he explained. 

And Web3, he went on to add, hasn’t seen as much adoption as some would hope because the products, or platforms, haven’t been up to the task. 

But the adoption takes time, which I know is something we’ve all heard before. Unfortunately, though, it remains the case, even as folks comment on how they’re now more bullish than they’ve ever been. 

When Santos asked why we don’t have a billion users onchain, Wood’s answer was simple: “User acquisition can be quite sticky.”

Unfortunately for us, there isn’t a one-size-fits-all solution for it. But Wood still feels like there’s an opportunity to build more transparent and agile operating systems that bring us into a new technological era.

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On my mind: Tariffs

Katherine: I’d be lying to you if I didn’t say I was slightly worried about the tariffs, especially in the short to medium term. These stock market wipeouts are no joke, and we should be watching them closely from our perches in crypto. 

However, I’m also of the mind that there’s not much for any of us to do. It truly is a wait-and-see moment. The lack of clarity at this point is acting as chum in the water, which is just leading to bloodshed. 

Moonrock Capital’s Simon Dedic put it perfectly this morning: “Just close the charts and sit it out.”

There’ll be a lot of noise this week, so it’ll be a test to see what really matters. And we’ll get to see just how correlated crypto and equities are.