Good morning everybody.
Bitcoin is trading around $77,000, but today’s bigger stories are happening underneath the price. Wall Street’s largest banks are preparing their own stablecoin infrastructure, traditional stocks are moving onto blockchain rails, Bitcoin miners continue converting their power and data-center assets toward AI, and crypto developers are already preparing for threats from quantum computing and increasingly capable AI systems.
The common thread is infrastructure. Crypto is becoming more integrated with traditional finance and AI at the same time, and that creates opportunities as well as new risks.
Wall Street Is Coming for Stablecoins and Tokenized Markets
Twenty-one financial institutions, including Goldman Sachs, Bank of America, Citi and Deutsche Bank, are working toward launching a U.S. dollar stablecoin through a new company in the first half of 2027. The project reportedly began with 10 institutions and has now more than doubled in size, with the group also considering other G7 currencies, beginning with the euro.
The obvious goal is to compete with companies like Tether and Circle while moving more traditional banking activity onto stablecoin rails.
Can they take over the existing stablecoin market?
I don’t think so.
If you’re already using Tether or Circle because they solve a problem your bank doesn’t solve, I don’t know why you’d suddenly get excited about a Goldman Sachs or Deutsche Bank stablecoin. Institutional customers are different. Banks could move enormous amounts of internal settlement and corporate activity onto these rails, reduce costs and make their existing businesses more efficient.
But there’s another issue I’m watching. The CLARITY Act debate has included restrictions around stablecoin yield. I wonder whether we’re watching the beginnings of regulatory capture. If non-bank stablecoin issuers have their hands tied on yield while banks can offer customers points, rewards or some other economic incentive through the broader banking relationship, that could give the banks an enormous competitive advantage.
That’s something worth watching rather than assuming all stablecoin issuers will ultimately compete under identical rules.
Traditional stocks are also moving further onto blockchain infrastructure. The London Stock Exchange Group is working with Kraken parent Payward on tokenized versions of UK-listed stocks using Kraken’s xStocks infrastructure. The plan is eventually to connect those assets with LSEG’s proposed 24-hour trading venue, expected in 2027 subject to regulatory approval.
The technology pitch is straightforward: longer trading hours, global access and potentially cheaper settlement.
Robinhood’s blockchain experiment is moving in the same direction. Decentralized exchange volume has reached approximately $1.6 billion, while activity around Robinhood Chain has also benefited Arbitrum. What makes Robinhood particularly interesting is the combination of crypto-native trading infrastructure with tokenized traditional financial assets.
We’re slowly watching the distinction between “crypto markets” and “traditional markets” get blurrier.
Bitcoin Mining Infrastructure Keeps Becoming AI Infrastructure
Hut 8 is another example of the Bitcoin mining industry’s enormous AI pivot.
Its Texas data-center campus is connected to Anthropic’s roughly $35 billion cloud agreement with Lambda, and Hut 8 has two long-term leases at the site worth approximately $19.6 billion, according to the figures discussed in today’s show. That figure is roughly 260 times the company’s most recent quarterly revenue.
From the company’s perspective, the decision isn’t particularly complicated.
They built infrastructure expecting Bitcoin mining to be the opportunity. AI companies now desperately need the same power, land, grid connections and data-center infrastructure.
If somebody is willing to pay you considerably more for infrastructure you already own, you pivot.
We’ve been talking about this repeatedly because I think it’s becoming one of the most important structural changes in Bitcoin mining. These aren’t necessarily just Bitcoin companies anymore. Some are becoming power and data-center companies capable of moving capacity toward whichever computing market offers the best economics.
That doesn’t mean Bitcoin mining disappears. It means the value of the infrastructure may increasingly be determined by what else it can do.
The SEC is confronting a similar technological shift from the regulatory side. Transfer-agent rules dating back to the 1970s are being reconsidered to account for tokenized securities, distributed ledgers, smart contracts and AI.
Welcome to government.
The financial infrastructure has changed dramatically while portions of the regulatory architecture governing it are still based on a world that existed before the personal computer.
Crypto Is Preparing for Quantum Computing and AI Attacks
Ripple developers are already preparing the XRP Ledger for a future in which quantum computers become capable of threatening today’s cryptography.
We’re not at “Q Day” yet. There is still enormous uncertainty about how many sufficiently stable, error-corrected qubits would actually be necessary to mount practical attacks against cryptographic systems, and simply counting the raw qubits in today’s machines doesn’t answer that question.
But I reject the idea that quantum computing should be dismissed because it hasn’t fulfilled every prediction people made about it.
We do this with technology constantly.
Virtual reality was supposedly overhyped because everybody isn’t sitting at home wearing a headset all day. That doesn’t mean the underlying technology isn’t impressive or useful. VR and related systems have applications in manufacturing, logistics, training and other specialized environments.
Computing itself took decades to move from enormous specialized machines to something ordinary families had sitting in their homes.
Quantum computing will take time too.
Researchers still have to improve the hardware, increase reliability, develop software and figure out which problems quantum computers are actually good at solving.
My basic view of technology is that once humans can conceptualize something that is actually consistent with the laws of physics, there’s a pretty good chance somebody eventually figures out how to build it.
So crypto developers should prepare before the threat arrives, not after.
Zcash developers are working on another side of cryptographic infrastructure: speed. They’re trying to reduce some private-transaction processing times from roughly three seconds to less than 200 milliseconds.
Three seconds is already pretty damn good. Milliseconds would make privacy technology considerably more practical for ordinary payments.
Then there’s AI.
OpenAI says its new Astro model has reached a critical cybersecurity capability threshold, meaning AI systems are becoming increasingly capable of finding previously unknown vulnerabilities and developing attacks against hardened systems with substantially less human assistance, according to the account discussed in today’s show.
For crypto, that’s worth taking seriously.
Smart contracts, bridges, wallets and exchanges secure enormous amounts of money, and much of the underlying software is publicly inspectable. AI that becomes dramatically better at finding vulnerabilities can help defenders audit software, but attackers get access to increasingly capable tools too.
If you’re running billions of dollars through publicly accessible code, get ready for that arms race.
Crypto Prices
Bitcoin is sitting around $77,330, down approximately 0.7% over 24 hours.
Ethereum is around $2,414, down approximately 1.1%.
BNB is approximately $687, up around 0.2%.
XRP is around $1.34, down approximately 2%.
Solana is approximately $98.13, down around 3.7%.
TRON is around $0.324, down approximately 0.5%.
Hyperliquid is approximately $81.29, down around 2.5%.
Dogecoin is around $0.081, down approximately 0.7%.
Zcash is approximately $812, down around 4%.
Total Crypto Market Cap: approximately $2.59 trillion.
Fear & Greed: Greed.
Bitcoin isn’t doing much today, but the infrastructure around it certainly is.
Banks are building stablecoins. Stock exchanges are experimenting with tokenization. Bitcoin miners are turning themselves into AI infrastructure companies. Regulators are finally trying to modernize rules written in the 1970s. And crypto developers are preparing for security threats from technologies that aren’t fully mature yet.
That’s where I think the interesting story is.
Don’t only watch the Bitcoin price. Watch the rails being built underneath the entire financial and computing system, because that’s where a lot of the changes are happening before they become obvious to everybody else.