gm friends —

Welcome back to your weekly crypto fix! Before we dive in, some HUGE news on the Internet Capital front.

We are creating an educational video series on YouTube for Ionic, a ~$200M DeFi app on the Mode network! If you want to learn how to actually use crypto apps, this is the place for you. Check it out and let us know what you think!

But enough about us, let’s dive in! Today’s topics:

• 🌙 Markets: Back in No Man’s Land

• 🤫 Crypto Cabals: Is Crypto Actually More Fair?

• 💵 Why You Shouldn’t Save Money: The Problem with Fiat

• 0️⃣ ZKsync: Ethereum’s Zero-Knowledge L2

Check out this week’s YouTube show for a deeper dive!

Want to be a better crypto investor? Subscribe, follow us on X, and check out our YouTube Channel to never miss an update - thanks for reading!

Markets: Back in No Man’s Land

Behold the updated market graphics! We now have one graphic for prices and year-to-date returns, and another for weekly price returns. Let me know what you want to see here!

We’re keeping the markets section brief today. But the TLDR?

Crypto markets have modestly recovered after the vicious selloff a few weeks ago and are holding relatively steady.

Most analysts believe that the outcome of the United States Presidential election will determine the market’s fate in the short to medium term. Want to know our take? Check out the latest Internet Capital YouTube episode here 👀.

Some other market takes:

• Are Institutional backers changing bitcoin’s role in the global economy? [TheStreet]

• Bitcoin $59K price may swing ‘drastically’ amid election year parallels [CoinTelegraph]

• Stablecoin Supply Growth Isn’t Eating Into Crypto Market Share: JP Morgan [Coindesk]

• ETH, SOL exhibit heightened price sensitivity amid wider market caution, Coinbase analyst says [The Block]

• This Week’s Economic Events Could Impact the Crypto Market [The Crypto Times]

Crypto Cabals: Is Crypto Actually More Fair?

Crypto people love to cite the industry’s commitment to decentralization, inclusivity, and democratization as evidence that crypto is a fairer alternative to traditional finance.

However, recent events reveal a stark contrast between these values and the reality of the industry’s power structures.

Coindesk reported this week that EigenLayer, the second largest project in the Ethereum ecosystem, pressured other projects to airdrop free tokens to its employees.

The incident has reignited discussions about the existence of "crypto cabals"—elite groups of industry participants that wield disproportionate control over the direction of crypto projects, often to the detriment of a broader community.

The controversy began when Coindesk revealed that the company behind EigenLayer circulated a list of its employees’ wallet addresses to various projects within its ecosystem that were preparing to issue tokens.

While some teams requested this list, others reported feeling pressured to comply with the implicit expectation that rewarding EigenLayer employees with airdropped tokens would ensure favor or maintain a positive relationship with the influential project.

Despite being marketed as "credibly neutral," EigenLayer's actions have raised serious questions about the fairness and transparency of its ecosystem. This is a huge problem considering EigenLayer’s prominence in the Ethereum ecosystem.

My Take

The fact that EigenLayer employees were able to claim nearly $5 million in free token rewards—simply by being part of a select group—exposes the disparity between crypto’s egalitarian ideals and the reality of who actually benefits most from the technology.

I think this is the primary complaint that most people have about crypto. We talk about decentralization and fairness, while the space remains riddled with scams and backdoor dealings.

BUT, I would argue that this isn’t because of the technology—it’s simply human nature. These sorts of things will always exist because people are people. All we can do is build systems that minimize inequalities, which is where crypto, despite its flaws, offers something different.

Unlike traditional finance, where such dealings are hidden behind layers of bureaucracy, crypto provides a transparent forum where these actions can be discovered and scrutinized by the community. The fact that incidents like this come to light at all is a testament to crypto’s power.

Crypto’s potential lies in its ability to create a more accountable system—one where oversight is not concentrated in the hands of a few but distributed across a network of participants who can collectively enforce fairness.

I believe that the promise of a more transparent system is worth striving for. As the industry matures, it’s essential that we hold those with influence accountable and continually work towards a system that better aligns with the ideals we preach.

Why You Shouldn’t Save Money: The Problem with Fiat

We’ve been deep in the weeds recently with our explorations of the Yen Carry Trade, Strategic Reserve Assets, and the ETF Carry Trade. So today we’re zooming out - let’s talk about why you shouldn’t save money.

It starts with fiat. Fiat currency - money that a government declares legal tender, but isn’t backed by a physical commodity - has become the standard for transactions, savings, and economic stability.

Despite its ubiquity, the nature of fiat money is often misunderstood, especially when it comes to its role in “saving” for the future.

The key issue is that fiat currencies are inherently inflationary. Central banks, like the Federal Reserve, have the authority to increase the money supply at will.

This flexibility is critical for managing economic crises and ensuring liquidity in the financial system, BUT it comes at a cost: the gradual erosion of purchasing power over time.

In other words, inflation acts as an implicit tax on the time and energy you spend to earn and save in fiat currencies. As prices rise, the value of your savings diminishes, making the goal of preserving wealth using fiat increasingly challenging.

So if fiat money is slowly losing value, why would you denominate your savings in it? Short answer - you shouldn’t. Fiat currencies are good for a lot of things, but saving for the long term isn’t one of them.

While fiat currencies are great for day-to-day transactions and managing short-term economic stability, their long-term value is fundamentally compromised by inflation.

This is where the concept of 'hard money' comes into play. Hard money refers to assets that are debasement-resistant and retain their value over time, making them a more reliable store of wealth.

Cryptocurrencies have emerged as a modern form of hard money. Unlike fiat currencies, which can be printed in unlimited quantities by central banks, many cryptocurrencies have fixed or limited supplies, creating a scarcity that naturally drives value over time as demand increases.

Moreover, the decentralized nature of cryptocurrencies means they’re less susceptible to the whims of government policies or economic shifts. In countries experiencing hyperinflation or political oppression, citizens have increasingly turned to crypto as a way to protect their wealth.

By saving in hard money assets like crypto, you’re not just preserving your wealth—you’re safeguarding your time and energy from the invisible tax of inflation.

While fiat money is necessary for everyday transactions, hard money assets offer a more secure and potentially profitable alternative when it comes to long-term savings.

So, why buy crypto? When it comes to preserving long-term wealth, diversification is key. Traditional assets like stocks and real estate play important roles but are also tied to the economic forces that affect fiat currencies.

By contrast, crypto offers a new dimension to portfolio management—a hedge against inflation, political instability, and the structural vulnerabilities of the traditional financial system.

Cryptocurrencies are also more than just a hedge - they’re growth assets. The rapid evolution of blockchain technology, increased adoption of decentralized finance (DeFi), and the development of new use cases for crypto assets are all strong tailwinds driving the space forward.

As the world becomes more digitally interconnected, the demand for decentralized and secure financial solutions is likely to grow, further enhancing the value of cryptocurrencies.

So by, including crypto in your portfolio, you’re not only protecting your wealth from the eroding effects of inflation but also positioning yourself to benefit from the technological trends that are shaping the future of finance. This dual role makes crypto a compelling choice for long-term “saving” and wealth preservation.

ZKsync: Ethereum’s Zero-Knowledge L2

Other News

If you didn’t catch it, check out our inaugural Mid-Week Crypto Update newsletter that debuted on Thursday. Its purpose is to keep you informed with the week’s crypto news stories as they develop.

This means that you’ll receive crypto news from the first half of the week on Thursday mornings and the rest of it on Sunday, in this newsletter. Let me know in the comments what you think the best structure is!

• Metamask Partners With Mastercard to Launch Crypto-Backed Debit Card in Europe

• Leveraged Microstrategy ETF To Launch

• Senate Majority Leader Chuck Schumer sets goal to pass crypto legislation by end of this year

• Bitcoin ETFs See $81M Outflow as Ethereum ETFs Cash In

• The Trumps' New Crypto Venture Reportedly Involves Digital Real Estate

• Franklin Templeton Files for BTC+ETH ETF

Thanks for reading!

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Nothing in this newsletter is meant to be taken as legal, tax, investing, or other advice. Internet Capital is for educational and entertainment purposes only. All views are our own, and not representative of any organizations with which we are affiliated. For any business partnerships please reach out via the email [email protected]