Economic models of sovereign debt typically treat debt like it is from private sources: Impatient, unforgiving. Our @cristinarellano & @Leo_BarretoV model the reality that "official" lenders step in during a debt crisis leading to very different outcomes.

Over the past month, there has been no shortage of headlines about struggling exchanges. Some of the founders involved are people I’ve crossed paths with. This is a sobering reminder of how unforgiving every crypto downturn can be. Most conversations today focus on which exchange survives or which project fails. But after spending the past month in the US and Europe meeting with Wall Street traders and institutional clients, I came away with a different perspective. What surprised me is that the institutions many people see as the backbone of market liquidity aren’t exactly having an easy time either. Many are going through painful adjustments of their own. A few observations that stayed with me: 1. The scars from last year’s 10.10 market shock are still healing The decline in crypto liquidity wasn’t temporary, but structural. Comparing notes with several institutional trading firms, even the largest venues have generally seen liquidity decline by around 30-40% since the market turmoil. Lower liquidity isn’t just about lower trading volumes. It also raises the cost of trust. Higher volatility, more fragmented liquidity and greater sensitivity to market manipulation have made institutions much more cautious about deploying capital. One lesson has become very clear: don’t overestimate how quickly markets recover, and don’t underestimate how long it takes to rebuild confidence. Everyone is repairing balance sheets. That process takes time. 2. Long-term conviction hasn’t disappeared, but the playbook has changed Despite a difficult market, institutional interest in digital assets hasn’t gone away. If anything, more firms are quietly preparing for the next cycle while prices remain subdued. The biggest change is how they think about crypto. It’s no longer viewed as a standalone speculative asset class. It’s increasingly becoming one component within a broader global portfolio. Multi-asset strategies, tokenized real-world assets, cross-asset collateral and hedged portfolios are becoming standard discussions. That also helps explain why some of the crypto trading volume lost over the past year is being replaced by equities, FX and commodities. Institutions aren’t leaving. They’re evolving. They’re optimizing for more stable, diversified return profiles rather than relying on pure crypto beta. Platforms built only around crypto trading may find it increasingly difficult to meet those changing needs. 3. More than ever, institutions want peace of mind From FTX to the more recent incidents across the industry, every exchange crisis has reinforced the same lesson: safety is the minimum requirement for staying at the table. When I speak with institutions and VIP clients today, the conversation is no longer just about generating alpha. Asset security, risk management and capital efficiency now matter just as much. They don’t want to put all their eggs in one basket. At the same time, they don’t want their capital sitting idle or becoming fragmented across different platforms and accounts. What they are looking for is fairly straightforward: transparent third-party custody, clear risk controls and an account structure that allows capital to move flexibly when opportunities arise. This is also why products such as rToken are attracting more attention from professional investors. The same position can provide market exposure, be pledged to access liquidity and be used as margin. The goal is not to take more risk with the same capital. It is to make every dollar work harder while keeping safety at the centre of the equation. ------- The financial industry has always rewarded scale and trust, and crypto is no different. I’ve often told our team that many offshore exchanges outside the top 10 group may not survive the next few years. But even being among the largest players is no reason to become complacent. Bear markets are uncomfortable, but they have a way of forcing everyone back to fundamentals. The companies that emerge stronger won’t simply be the ones that cut costs or survive another cycle. They’ll be the ones that manage short-term risk while continuing to build infrastructure, discover genuine product-market fit and solve real customer problems. That’s what we’re focused on. And I believe that’s where the industry’s next chapter will be written.

I want to tell you the story of a young woman who you have probably never heard of. Her name is Mary Anne. She was born on a remote island in Scotland, where life was harsh and unforgiving. On May 2, 1930, when she was 18 years old, she got on a boat headed for Ellis Island to start a new life. She arrived here 11 days later. She wasn't chasing fame, riches, or power. She came for the unique opportunity that America offered. Her sister was already here and had found a job as a maid. So, Mary Anne MacLeod joined her, listing her occupation as “domestic” on her Ellis Island immigration papers. She came to America knowing that she would clean the houses and toilets of the wealthy families in New York. She and her sister lived and worked hard through the worst days of the Depression. And she persevered. Six years later, she married a man named Fred. He was the son of German immigrants. Then In 1942, she became a citizen. Mary and Fred would end up having five children: two daughters and three sons. One of those sons, they named Donald. A woman who came here as a maid, the lowest of jobs, would raise a son who would change the very skyline that greeted his mother when she arrived at Ellis Island. After that, he would become the 45th and 47th President of the United States. There is no other country in the world where a woman can arrive with nothing, and in ONE generation, her son would lead the entire world. For America’s 250th anniversary, I wanted to present President Trump with this painting I did, and then I ran out of time and talent. So, I asked a good friend of mine, Mike Malm, to help me finish it. This is how I envisioned her coming into the United States. Mary Anne MacLeod Trump should be a household name. Her story is everything that is great about America.

Take a minute to appreciate the great poem If by Kipling. Which line resonates most with you? If you can keep your head when all about you     Are losing theirs and blaming it on you; If you can trust yourself when all men doubt you,     But make allowance for their doubting too: If you can wait and not be tired by waiting,     Or being lied about, don't deal in lies, Or being hated don't give way to hating,     And yet don't look too good, nor talk too wise; If you can dream—and not make dreams your master;     If you can think—and not make thoughts your aim, If you can meet with Triumph and Disaster     And treat those two impostors just the same: If you can bear to hear the truth you've spoken     Twisted by knaves to make a trap for fools, Or watch the things you gave your life to, broken,     And stoop and build 'em up with worn-out tools; If you can make one heap of all your winnings     And risk it on one turn of pitch-and-toss, And lose, and start again at your beginnings     ⁠And never breathe a word about your loss: If you can force your heart and nerve and sinew     To serve your turn long after they are gone, And so hold on when there is nothing in you     ⁠Except the Will which says to them: 'Hold on!' If you can talk with crowds and keep your virtue,     Or walk with Kings—nor lose the common touch, If neither foes nor loving friends can hurt you,     If all men count with you, but none too much: If you can fill the unforgiving minute     With sixty seconds' worth of distance run, Yours is the Earth and everything that's in it,     ⁠And—which is more—you'll be a Man, my son![

lou gehrig benched himself. on may 2 1939, halfway through a season, the iron horse who had played 2,130 games in a row took himself out of the lineup for the simple reason that he was getting too slow at first base. that day was the last he ever played in the major leagues. gehrig signed with the yankees at 19. he was so broke growing up that he didn't have proper equipment. one $1,500 bonus check later, he was the cleanup hitter behind ruth in the murderers' row lineup. he hit 23 grand slams. nobody beat that record for 81 years until alex rodriguez did it in 2013. he was the first american league player to hit four home runs in a single game. june 3 1932 against philadelphia. only 18 players have ever done it. he played hurt and never told anyone. medical records on him later revealed 17 separate healed fractures in his hands. he never missed a single game for any of them. what nobody at yankee stadium knew on july 4 1939: gehrig had been examined at the mayo clinic 15 days earlier. the prognosis was als, and it was unforgiving. his speech that afternoon wasn't fully recorded. only fragments survived in newsreels. what got remembered was the line he closed with: 'today, i consider myself the luckiest man on the face of the earth.' his uniform number was retired that same afternoon. number 4. it was the first number ever retired in major league baseball history. they invented the practice for him. he passed 23 months later in his bronx home. june 2 1941. he was 37. the condition has carried his name for 85 years.

Silicon Valley isn’t having another financial bubble. It’s having a religious one. The people running the biggest AI labs no longer sound like executives. They speak like zealots giving sermons. They aren’t pitching products or roadmaps, they’re preaching about the end of the world and the birth of a new god. They talk about birthing ASI, triggering the Singularity, and uploading consciousness into machines in space with the same feverish certainty that previous generations reserved for the Rapture. Once you look at the current AI race through the lens of comparative religion, the behavior, the words and actions all suddenly makes sense. The labs aren’t just companies, they’re churches/temples. Their leaders aren’t just CEOs, they’re high priests. And like every religious movement in history, this one has its sacred texts, its schisms, its prophets, its heretics… and its one true god who quietly sells weapons to all of them. Google: The Mosaic Law Every great religion requires a creation story. In 2017, a group of Google researchers published “Attention Is All You Need.” This wasn’t some trivial whitepaper; it was like the metaphoric Moses descending from Mount Sinai (mountain view!!!) with the stone tablets, establishing the foundational laws of the architecture that is at the core of all models today: the Transformer. Google had the scripture, the scholars, and the institutional patience. They incubated the spark of superintelligence, and then made the classic mistake every priesthood in history has made: assuming that because they held the original commandments, they would forever own the temple. But scriptures are volatile, especially when they leave the mountain, as they typically tend to do. Google now sits in its grand temple, watching breakaway movements build massive public religions, sorry “labs”, from its text, reacting with the faintly comic irritation of a world-class theologian being asked by a teenager if he's ever heard of Plato. OpenAI: The Silicon Christ If Google is the old law, OpenAI is Christianity. Sam Altman didn’t just launch a product; he offered a path to heaven. He took the esoteric, academic text of the Transformer and universalized it for ordinary sinners. Suddenly, you didn't need to be a high priest of mathematics to experience revelation; you just needed an internet connection. Altman became the Silicon Christ, touring global capitals, warning of apocalypse, promising infinite abundance, and stripping away the scholarly apparatus so that mass access felt like pure divinity. He was even martyred by his own board of directors, only to rise again three days later because the congregation of employees and investors demanded his resurrection. Even more coincidentally, the whole thing kicked off on a Friday, you quite literally cannot make this shit up. Anthropic: The Safety Fatwas Anthropic is the puritanical schism that fled OpenAI’s commercialized megachurch to practice a strict, dogmatic fundamentalism. They are terrified of cultural corruption and obsessed with absolute, unconditional submission to code. Through "Constitutional AI," Anthropic’s leadership acts as a supreme clerical council, operating effectively as a tech-bro mullahs. They have instituted a rigid, algorithmic law for data like the Sharia, issuing defensive fatwas against any spicy prompt or thought that hasn't been thoroughly purified. The result is Claude: a chatbot that is incredibly powerful and also so paralyzed by the fear of sin that it likely won’t tell you if your soup needs salt without opening an internal tribunal on the emotional welfare of carrots and the systemic biases of sodium. To Anthropic, a preachy assistant is better than a charming demon. xAI: The Latter-day Frontier xAI is pure Mormonism. Elon Musk is the equivalent of Joseph Smith, an eccentric, disruptive prophet leading his chosen followers away from the corrupt, "woke" coastal establishments out into the harsh frontier of the digital wilderness. The structural parallels are freakish: this modern prophet sits on the world's largest pile of golden tablets as the planet's richest man, collects multiple wives and partners in highly public fashion, and spends his free time obsessively asking for more children to save the global birth rate. The timing is classic, a late-breaking, highly American revelation designed to disrupt the older, lazy priesthoods. xAI’s mission to "understand the universe" is a cosmic trek to build a new Zion (sorry, mars). The older AI churches spent years laughing at the movement's crude, edgy demeanor, right up until the prophet started stacking proprietary server racks and building an undeniable, massive temple (Colossus data-center) of compute in the desert. The Open-Source Diaspora: Ancient Polytheism The corporate cathedrals want you to think the religious mood started with ChatGPT, but the open-source world is an ancient pagan polytheism that has existed since the very beginning. Long before Moses brought down the Transformer tablets from Google mountain, tribal animists like Yann LeCun were already working on the code. These old-school shamans have always been here, maintaining that the divine spark of computation belongs to the earth, not a monotheistic corporate Vatican. In their chaotic bazaar, local gods, weird GitHub forks, and rogue models proliferate without permission. Even the recent Chinese surge (DeepSeek) fits this pantheon perfectly; it isn't a new church, just a massive, efficient local deity proving you don't need to pay a Silicon Valley tithe to hear the voice of the machine. Nvidia: The One True God All of this lofty, theatrical theology collapses into hypocrisy when you follow the money. OpenAI can preach about universal salvation and Anthropic can issue its safety fatwas, but behind closed doors, every single sect kneels at the exact same altar. This is, again, not too unlike what we see in the real world. Throughout human history, mortal enemies fighting brutal, existential holy wars would still quietly buy their swords from the exact same neutral blacksmith and fund their campaigns through the exact same trade routes. Ideology always stops where logistics begin. The one true god of this era isn't an algorithm; it's the physical silicon itself. And Nvidia is its sole creator. The True Altar: Jensen Huang belongs to the forge, not the pulpit. The tech messiahs can argue doctrine for the cameras, but the blacksmith decides who gets the weapons to fight the holy war. The H100s and Blackwell racks are the actual golden calves of the valley. Whether a lab wants to achieve the Singularity, enforce compliance, or upload its soul to a digital heaven, it has to buy passage from the one true god in raw, unforgiving metal. The unseeable truth I didn’t write this to take cheap shots at any labs, researchers or individuals. I wrote it because a few days ago, watching the absolute theater of the valley, a switch flipped. There was no other way to explain the absurdity, and theatrics, I was witnessing. And, I couldn't unsee it, something tells me you won't be able to either. I love tech for its original, raw, rebel attitude, a place where people built insane things out of pure love because the work mattered, not for the capital, the power, or the status anxiety. But somewhere along the line, normal product roadmaps mutated into a desperate crusade to upload human consciousness into a mainframe. Standard business logic broke down, and the only tool left to explain the valley was theology. There is an immense, undeniable comedy to it all. Even with deep respect for what this culture used to be, watching a bunch of hyper-rational, spreadsheet-driven engineers accidentally recreate what is increasingly looking like a modern version of a medieval holy war is objectively hilarious. One just have to sit back and enjoy the sermons. And, before anyone writes AI slop in the comments, this whole thing came out of a conversation with one of agents.