AI Fatigue, Robinhood & Every Market Becoming Crypto | Weekly Roundup
Speakers
Santiago R. Santos
— Co-Host, Empire / Founder, Inversion Capital
Summary
Santi and Rob discuss the declining odds of the CLARITY crypto bill, the migration of crypto-style volatility into traditional markets, AI capex strength versus semiconductor volatility, Robinhood's crypto-driven growth and chain launch, the collapse of Ethereum L2 TVL, and early signs of AI fatigue among institutional LPs. The conversation highlights blurring lines between TradFi and crypto, with institutions and retail increasingly embracing tokenization and prediction markets.
- CLARITY bill odds fall to 30% on Polymarket; Rob views it as appropriately priced, but expects SEC/CFTC rulemaking to proceed regardless.
- AI capex from Meta, Microsoft, and Google remains robust, with useful life of GPUs longer than expected, supporting the long AI/semis thesis.
- Retail leverage, algorithmic trading, and short-termism are making traditional markets trade like crypto, driving extreme volatility.
- Robinhood reported strong earnings (1.3B, +32% YoY), launched its own chain and tokenized stocks, and is viewed as a bellwether for crypto adoption.
- Ethereum L2 TVL dropped to 2023 lows amid hacks, low yields, and AI distraction; Santi argues DeFi applications like Uniswap and Ethena will benefit more than infrastructure layers.
- Visa announced a stablecoin platform, while Ondo launched a private institutional chain, signaling competition for tokenized asset infrastructure.
- AI fatigue emerges among LPs, drawing parallels to the 2021 crypto bubble; crypto VC deal count hits a low as capital concentrates on later-stage and AI deals.
- Market-neutral strategies dominate crypto liquid fund performance, and that approach is expanding into traditional markets.
Ideas
AI capex strong, semis long intact.
AI and semiconductor capex remains robust as Meta, Microsoft, and Google maintain or increase capex guidance; the useful life of GPU racks is longer than anticipated, supporting the long-term AI investment case; the AI trade is still very much intact despite volatility.
Robinhood leading crypto, earnings beat estimates.
Robinhood is the most forward-leaning traditional company in crypto, with prediction markets, Robinhood chain, tokenized stocks, strong earnings growth (1.3B, +32% YoY), distribution advantage, and could serve as a leading indicator for crypto flows; the stock benefits from these crypto initiatives.
DeFi apps outperform Ethereum L2 infrastructure.
Amidst low TVL, increased hacks, and declining user activity on Ethereum L2s, DeFi applications like Uniswap and Ethena stand to benefit more than the infrastructure layers such as Arbitrum and Ethereum; the value accrual may shift to applications.
DeFi apps outperform Ethereum L2 infrastructure.
Ethereum/L2 infrastructure is framed as losing value accrual to applications amid low TVL, hacks, and weak user activity; bearish but no explicit short/puts call.
DeFi apps outperform Ethereum L2 infrastructure.
Arbitrum/L2 infrastructure is framed as losing value accrual to applications amid low TVL, hacks, and weak user activity; bearish but no explicit short/puts call.
